Staffing up for the holidays: Retailers offer higher wages and perks as hiring incentives

Williams-Sonoma is offering $15 per hour to workers. New hires at ABC Fine Wine & Spirits can get a $500 seasonal bonus. And Macy's is holding a hiring event for associates in Sarasota, with on-the-spot job offers for fragrance salespeople and retail associates.

In a holiday season that's already shaping up to be busy, retail companies are doing all they can to hire adequate personnel.

Faced with a tight labor market, pressing supply chain issues, high demand and an economy that favors less consumer-facing jobs, retailers are offering higher wages, signing bonuses and other perks in order to stand out.

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Chris Jones, an economist at the University of South Florida, said that many of the country's largest retailers prepared and staffed up ahead of the Thanksgiving shopping weekend. But there are still plenty of "now hiring" signs to go around.

"We’ll probably face a bit of a labor market shortage this holiday season, but we’re facing that with goods as well and it doesn't seem to be stopping the shoppers from engaging," Jones said.

The National Retail Federation said it expects U.S. retailers to hire between 500,000 and 665,000 seasonal workers this holiday season, up from 486,000 last year. That includes employees in both brick-and-mortar retail stores and warehouse distribution centers.

Some of that holiday hiring may have taken place earlier than usual, the retail federation said, because a lot of companies encouraged customers to shop earlier through deals and advertising.

So far, holiday spending appears to be relatively strong. Adobe Analytics reported that online spending on Black Friday and Cyber Monday dropped compared to last year, but foot traffic inside retail stores was up, rising 47.5% over 2020, according to Sensormatic Solutions. Jack Kleinhenz, chief economist for the National Retail Federation, said Friday that spending this holiday season could exceed the pre-COVID sales numbers of 2019.

To help deal with supply chain issues, which have left some grocery store and big box shelves looking pretty bare, many retailers have boosted their warehouse and fulfillment center hiring.

In September, Target announced it would hire 100,000 seasonal workers in 2021 and 30,000 people in supply chain positions to help deal with inventory.

At TJX Companies, the Massachusetts-based parent company of TJ Maxx, HomeGoods and Marshalls, the majority of seasonal employees will be part-time, spokeswoman Bethany Crocetti said. But seasonal workers in distribution and fulfillment will work full-time schedules.

Over the last couple of years, retailers' strategy when it comes to inventory has been keeping as little as possible on hand, Jones said. But that strategy is successful only when every link of the supply chain works as it's supposed to, he said.

"Now, with what we’ve witnessed with the giant supply chain distribution at major ports of entry, there's the recognition that one, we've gotta do more to improve infrastructure at the country's biggest ports, and two, we have to invest in warehousing because it's not just about keeping up with Amazon," he said. "If you don't have some stock of inventory in a fulfillment or warehousing type facility, you could get in big trouble pretty quickly, if the supply chain breaks down as it has."

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Recruitment

Looming over the current holiday season is a new economic norm that was ushered in after COVID-19.

Before 2020, retail and restaurant work was never considered high-risk, Jones said. It seemed unthinkable that the floor would drop out from under the industry, leaving millions of workers suddenly without jobs.

But then COVID happened. Stores closed and restaurants shut down. Bars that had been lively and busy just weeks or even days before were suddenly completely silent.

Retail workers now have to deal with job uncertainty, frustrated customers with various feelings about safety guidelines and the risk of getting sick themselves, Jones said. That's why it's been more difficult to get people into those positions.

"A lot of individuals want to look at this as some sort of cultural rebellion. I'm not saying there isn't an element of that to this, but I tend to believe a lot of this has to do with the fact that these individuals want to be compensated for working in that environment if this could happen again," he said. "There's an element of, 'If I'm going to get into an occupation where the risk of being let go is high, I want to be compensated for it.'"

This is what's driving companies to offer signing bonuses, higher starting wages and other incentives. Stephanie Jimenez, a spokeswoman for Macy's, said the department store chain is raising its starting wage to $15 per hour by May 2022.

What retail workers need goes beyond just pay, however. There's a lot of interest among consumers to get out there and shop this holiday season, especially because last year was so restricted, said Larry Barton, professor of crisis management and public safety at the University of Central Florida.

This adds even more stress to retail workers, Barton said.

"Those who are filling shelves are usually workers making below $17 an hour. Many of them are working two jobs and working extra hard to make ends meet," he said. "They face the same inflationary pressures store managers, but in many ways they share a disproportionate burden because they are locked into an income stratification that does not give them flexibility."

Because of this, it's important for management to go out of its way to make workers feel appreciated, Barton said. Little things like bringing in donuts for the workforce go a long way, he said.

"If you're treated like cattle and spoken to in derogatory way or worse, don't be surprised if you're (only) keeping 7-8% of people," he said.

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This article originally appeared on Sarasota Herald-Tribune: Holiday: Retailers offer higher wages, perks as hiring incentives