With the unemployment rate reaching 3.7% in September 2018 — the lowest rate since December 1969 — retailers
are likely feeling the heat to fill positions with qualified candidates. Now, that
pressure has been amplified: Amazon raised its minimum wage to $15 per hour and is lobbying for an increase in the U.S. federal minimum wage, signaling
to the rest of retail that it’s time to pony up.
Given Amazon’s power as an industry trendsetter, the RTP team discusses what other retailers can
and should do to deal with the tightening of the labor market, as well as the
potential advantages for retailers in needing to compete for workers.
Debbie Hauss,
Editor-in-Chief: Retailers can’t ignore the low unemployment statistic, and
they should be offering a fair and competitive minimum wage, so the latest move
by Amazon will be a wake-up call for many companies. But to really succeed
in securing the best seasonal and long-term workers, retailers must do
more. Today’s workers, especially younger employees, are looking for other
reasons to come to work every day and be proud to represent the
brand. Companies should be looking at ways to improve employee training
and scheduling, which will create an employee base that
helps to improve the customer relationship and, in turn, sales.
Adam Blair, Executive
Editor: To me the most interesting aspect of this story is not the wage
hike itself, but the fact that Amazon plans to actively lobby for national legislation to
increase the minimum wage. Whether you think this is a good idea or not (I
certainly do), it’s yet another sign that Amazon’s Jeff Bezos sees himself as
not just a retail industry leader but a leader, period. I’m of two minds about
this: In an era when our political institutions are failing us, I’m glad someone is
stepping up. On the other hand, nobody voted for Jeff Bezos — although he is at
least relatively transparent about his efforts, as opposed to other
behind-the-scenes power brokers and kingmakers. As for other retailers, they
should explore a range of non-monetary benefits to entice workers: health care,
training/education subsidies and a clearer upward
career path are all attractive lures, with the bonus for
retail employers that these offerings help create a healthier,
smarter and more motivated workforce.
Advertisement
Glenn Taylor, Senior
Editor: Amazon’s decision practically forces other retailers to budge on wage
hikes.
While the company hasn’t exactly been known for treating its workers well
in the past, it is now setting a key precedent as to how retailers must
approach hiring. It’s also interesting that, given how Walmart has fought
Amazon neck-and-neck in recent years, the retail giant is now behind again —
even though it raised its own minimum wage to $11
per hour in January. As one of the biggest employers in the U.S., if
Walmart is forced to raise wages again that would likely raise all boats, since
no one wants to be outcompeted by Walmart on price and employee expenses. Minimum wage isn’t the only thing that’s important
to employees, but a change like this would force retailers to at the very least
get creative, for example by making it more fun to work there. On the whole, retailers
can’t keep treating the job as if it’s something employees should just slog
away at until something better comes along. If they can figure that out, they
won’t need to worry about filling positions in the first place.
Bryan Wassel, Associate Editor: While the tight labor market could pose a problem for
holiday hiring, the best retailers are already well-prepared for this
eventuality, and have developed a pool of seasonal candidates who they know
will return again and again. As discussed in Retail TouchPoints’ Hiring For The Holidays special report, the best candidates for seasonal
work are employees such as college students who are happy to return every break
to earn some money. However, not every store has the luxury of hiring these
associates, which means the industry should expect some upward pressure on
wages as they search for candidates. The other option is the very real
possibility of a customer service drop, which isn’t an option as we approach
the busiest time of the year.
