As the temperature rises, so does the pressure on retail and hospitality leaders to fill seasonal positions. We’re officially entering the summer surge, that frantic period when retailers and resorts must scale their workforces almost overnight to meet seasonal demand.
In industries with high volumes of hiring, speed can become the only metric that seems to matter. When a retailer has a line of customers out the door and a staffing schedule full of gaps, the temptation to move a candidate from interview to onboarding in record time is overwhelming. Sometimes organizations take a “speed only” approach, trying to make the hiring process as fast as possible to get new hires in the door. This may be especially tempting in the retail industry, which has about 586,000 projected openings for sales workers each year.
However, this shortcut can become a potential detour toward financial loss. By the time the summer rush reaches its peak, a company may have spent thousands in training and recruitment for roles that become empty just as demand hits its ceiling.
When a seasonal hire leaves halfway through their short tenure, there’s little time left to recover the lost productivity or the sunk recruitment costs. However, according to Equifax data, organizations that add pre-employment verifications experience 32% higher six-month retention rates, which can help better secure the stability and time that matter when an employee is needed for an entire summer season.
The Higher Cost of the Quick Hire
Retailers already face an uphill battle regarding retention. U.S. retail organizations experience an average employee turnover rate of approximately 60%, the fourth highest industry average in the country, representing a quit rate 25% higher than the average across all U.S. industries.
Rushing the hiring process may present a significant financial risk, recent data from Equifax suggests. While skipping verification can result in short-term financial savings, Equifax research shows that in the retail trade industry, over 40% of employees who leave jobs within 60 days are often likely to repeat this behavior with new employers. This has the potential to cost retailers thousands of dollars in wasted training and recruitment cycles per seat.
A simple employment verification can help identify a candidate’s proclivity for short-term tenure. In a sector already turning over around six out of every ten employees, few retailers can afford to add any risk factor.
We often think of turnover costs in terms of the visible expenses: the initial advertising for the role, the recruiter’s time and the basic training materials. But these can be just the tip of the iceberg. It costs an estimated $6,279 to $11,700 to replace an entry-level or hourly employee. So although one individual hire may not seem risky, in an industry where margins can be razor thin, making the best individual hire decisions can have a significant financial as well as service impact.
The costs of a bad hire can include:
- Productivity loss: Devoting management hours to training an individual who leaves can present a loss of productivity for all involved, especially for the supervisor who then has to hire and train another new employee.
- Poor customer experience: Sales associates and other frontline workers are often the face of your brand. A bad hire who lacks the experience they claimed to have can lead to poor service and lost customer loyalty.
- Team burnout: When a new hire fails, the burden falls back on your core full-time staff, which can even lead to a “contagion effect” where your best employees could begin to look for the exit.
The Integrity Gap: A Growing Risk
The pressure to hire quickly isn’t just a threat to retention; it can also be a threat to your organization’s security, culture and brand integrity. In our age of AI, when candidates can build the seemingly almost perfect resume, candidate-provided information can become increasingly unreliable. According to an Equifax survey of HR professionals, 71% have encountered fabricated or misleading candidate information.
While most organizations already perform some level of criminal background check, relying on that alone may leave blind spots. Whether it is a slight inflation of job titles or a complete fabrication of employment dates, misleading candidate information is becoming increasingly more prevalent. Supplementing an established criminal check with automated education and employment verifications can potentially pay massive dividends in the future.
Without a robust verification process, a company might not be just hiring a stranger — it could be hiring a potential liability. Completing verifications of previous employment can help uncover potential risk and build greater trust in a candidate before an offer is ever made.
A New Strategy for Hiring Surges
How can retail leaders balance the need for speed with due diligence? An answer lies in shifting the focus from “fastest hire” to “fastest qualified hire.” First, hiring teams must acknowledge that employment verification is not a luxury, it’s a helpful safeguard for their bottom line. And by utilizing automated verification technologies to help streamline the data-gathering process, retailers can perform these checks in a fraction of the time compared to traditional manual processes.
In the race to fill roles, the winner isn’t simply the one who hires the fastest, it is often the one who hires the right people the first time. Pre-employment verifications can help provide the bridge to better reach that goal and make the summer — and the rest of the year — a time of greater growth and profitability, instead of wasted seats and endless recruitment cycles.
Bart Lautenbach is SVP and GM of Talent Solutions at Equifax Workforce Solutions. He has more than 20 years of experience leading product and sales teams in the industrial manufacturing and technology industries. He currently leads a business unit focused on providing HR professionals and background screeners with solutions and insights that help them verify and validate hiring candidates.
