Retailers are anticipated to hire up to 650,000 seasonal workers for the 2018 holiday season, up more than 10% from last year’s total, according to the National Retail Federation (NRF). As many as 63% of retailers plan to hire as many or more seasonal workers for the holidays as they did last year, according to recent research by Korn Ferry. With the national unemployment rate now at 3.9%, there’s no guarantee that all these positions will even be filled — especially after 23% of retailers fell short of their hiring goals last year.
As many as 53% of retailers consider employee hiring/retention to be one of their greatest store operations challenges, according to the 2018 Retail TouchPoints Store Operations Survey. Additionally, 50% say that employee training/engagement is a top challenge.
The pressures of the holiday season undoubtedly magnify these challenges even further. With retail’s biggest e-Commerce player announcing it would raise its minimum wage to $15 per hour, retailers must get creative in attracting seasonal employees beyond the promise of a paycheck; train them effectively; and keep them engaged throughout the season. It’s not enough to simply fill a store with warm bodies; retailers must hire candidates that they are willing to invest in.
Will Amazon’s Wage Hike Significantly Impact Holiday Hiring?
Amazon’s impact on holiday employment is always significant, with the e-Commerce giant hiring 120,000 seasonal employees during the 2016 and 2017 peak seasons. While the company hasn’t unveiled its full seasonal plans yet, Amazon noted that it would raise the minimum wage for all U.S. employees to $15 per hour in November.
With retailers still scrambling to fill open positions, Amazon’s move brings additional pressure, at least from a wage standpoint. Target bumped its minimum to $12 per hour and plans to continue increasing the wage to $15 per hour by 2020. Walmart now remains the laggard among the retail giants at $11 per hour. It’s not quite an apples-to-apples comparison, however, since Amazon employs far fewer in-store associates than its big box competitors. Warehouse and distribution center salaries tend to be higher than those paid in store settings.
“Amazon wanted to up their game for a couple of reasons,” said Shep Hyken, customer service expert and Chief Amazement Officer at Shepard Presentations, LLC in an interview with Retail TouchPoints. “They wanted to get employees in and they realize it’s going to be competitive to do that. Also, they want to give employees a better experience, not just by paying them more. They’ve had plenty of press about the employee experience that they’re working on reversing. As a result of the higher wage, they set the bar for others who say ‘Hey, do we need to match this?’ Maybe you do, maybe you don’t. Here’s what you do, you have to offer employees something. Compensation goes beyond cash.”
“Will this be a game changer for retail hiring? No,” said Mel Kleiman, employee recruiting consultant and founder of Humetrics, in a RetailWire discussion. “Amazon does not have any retail employees. It has warehouse and distribution employees. Most people who work in retail do not like the idea of working in a distribution center.”
Kohl’s, JCPenney Offer Special Shopping Days, Raffle Entry
Some retailers are going beyond increasing hourly pay to retain and hire new associates. For example, Kohl’s announced it was offering 15% discounts and “associate shopping days” for the seasonal workers they hired this summer.
This year, JCPenney is offering hourly associates at stores, supply chains and call centers a 25% discount and entry into a raffle. Eight random employees will be awarded a choice of either a $5,000 trip to Alberta, Canada; New York City; or Miami, or prize packages worth $5,000, each with a different theme, including smart home, outdoor, technology and glamour bundles.
“Retailers will have to offer competitive compensation or other perks to attract the workers needed for this holiday season,” said Andrew Challenger, VP of human resources firm Challenger, Gray & Christmas, Inc. “Already, we have seen some retailers offering discounted merchandise or special shopping days for their employees.”
Even if the added perks for a seasonal position are limited to money, retailers can still be more transparent about how they compensate and incentivize employees, according to Harry Friedman, Founder and CEO of The Friedman Group, a retail consulting and sales training firm.
“Very rarely does a retailer set up an obvious in-your-face incentive program,” Friedman said. “It would go like this: ‘Good morning, team. Our goal today is $20,000. We hit that goal today and it’s $100 in every one of your pockets. Want to go for it?’ If this employee is looking to make some extra money during the season, then let them make some extra money.”
This Holiday, Retailers Must Make The Employee Experience F.U.N.
Perks, incentives and other benefits aren’t the only tools retailers have in this area. In tune with the season’s atmosphere, retailers should strive to make the working experience valuable and enjoyable. Hyken described a three-step process for retailers seeking to reel in (and keep) the right hires ahead of the holiday season: F.U.N., which stands for Fulfillment, Uniqueness and Next.
“If fulfillment means an extra few bucks for the holiday so that you can buy extra gifts, that’s one version of fulfilling somebody’s need, but you want them to come to work in the right frame of mind,” said Hyken. “Leverage people for the unique talents they have. If someone for example speaks two languages, that might be a benefit to an employer as more shoppers come in. Number three is next. Are people excited to come in for what’s next? Is it the next project, the next new sale or item we’re going to have, or is it just that it’s a great place to work so people are excited to come in the next day?”
Remember: The Shopper Is Likely Buying For Someone Else
While retailers have major decisions on their hands when it comes to hiring the right employees, they also must put them in an optimal position to succeed by offering the right types of training. Holidays bring not just more store traffic, but also consumers who may be on an unfamiliar shopper journey.
These shoppers don’t always know the exact product they want, and may not even be familiar with the store they’re stepping into. That’s why retailers should focus on hiring for positions that are more easily teachable, so that the more experienced employees are facing shoppers when they ask tough questions related to merchandising, Friedman said.
“There’s a huge increase in buying for other people as opposed to yourself,” Friedman said in an interview with Retail TouchPoints. “If that’s true, that means people who would normally never come into your store, or typically wouldn’t shop with you, now will. It’s an opportunity to show your stuff to first-time buyers or gift buyers. When we coach retailers, it’s solely for operational positions and not sales positions. We could teach the average employee to restock the shelves, straighten up the merchandise, ring up sales at the cash register, or do any of those things in a tenth of the time that we could teach them to know the merchandise and actually sell it.”
Giving employees the best chance to succeed will only help retailers in the long run, and could lead to a better chance of retaining the employee for the next holiday season — or perhaps even as a full-time team member. But before they reach that point, retailers must make the effort to attract this talent, train them effectively and make the job one worth staying at in the first place.
“The part that most companies will not properly budget for is that it’s going to be a short-term job to bring someone on,” Hyken said. “There’s a time and cost of getting them to a point where you feel good about them being on the floor, so that you’re not taking a risk that they’re going to alienate a customer. That’s a very important piece in the hiring of part-time people.”