Finding Employees in the New Retail Reality
Less than a year ago, who would have thought finding employees would be a problem? In the weeks following the outbreak of the pandemic, unemployment skyrocketed to nearly 15% when more than 23 million Americans were put out of work. But now, even with the economy growing at a record pace and unemployment below 6%, “Help Wanted” posters have become signs of the times.
Depending on the source, American businesses can’t find workers because:
- Government-funded benefits pay more than most minimum wage jobs.
- A large percentage of those put out of work by the pandemic have either retired early or dropped out of the workforce altogether. Senior workers who heavily supported the retail industry finally decided to quit.
- Many people working lower-paying customer service jobs with high degrees of social interaction are still fearful of getting the virus and are looking for a different vocation.
- People with young children still must decide between working and taking care of their kids.
The Labor Department’s June report reveals a record 9.5 million job openings. A recent U.S. Chamber of Commerce report also backed up those figures showing that more than 90% of American companies say a lack of available workers is slowing the economy. That’s more than COVID-19 issues (44.9%) and social uncertainty (37.5%) combined. Whatever the reason, finding employees is difficult for U.S. businesses in most industries.
Let’s face it, the coronavirus caused just about everyone to take a hard look at their jobs and lifestyles, and many people decided it was time for a change. A Pew Research Center survey showed that 66% of Americans put out of work by the pandemic “seriously considered” changing their professions during their time off.
People who worked in lower-paying restaurant, retail and other public service jobs, after being laid off or having their hours cut, began seeking higher-paying positions where they could reduce personal contact and exposure to the virus.
In the past year:
- American grocery stores lost more than 49,000 workers.
- Nursing care facilities dropped 20,000 employees.
- Courrier workers declined by 77,000.
- Manufacturing lost 18,000 positions.
The Labor Department reports that a record 4 million people quit their jobs in April alone.
Many older workers, who for years filled many of those lower-paying part-time positions, disproportionately accounted for many of the workforce dropouts. Bureau of Labor Statistics numbers show that more workers 65 and older left the labor force in 2020 than in any year since it began tracking that information (1948).
As usual, this great reassessment of employment and lifestyle and many permanent workforce dropouts leaves many customer service industries needing workers.
The shortage of workers comes at a time when many small businesses are trying to ramp up their stores as pandemic restrictions are easing. Increased vaccination rates and governmental income supplements have shoppers more at ease about in-person shopping and chomping at the bit to hit the stores.
According to a March survey by the National Federation of Independent Business, 48% of small business owners said they had job openings they couldn’t fill.
National Retail Federation Foundation (NRF) President Ellen Davis says small retailers face three core challenges in hiring.
Finding employees who are ready to hit the ground running.
- 72% of small retailers struggle at finding employees with the skills to be immediately successful.
- 61% are challenged to find good candidates for entry-level positions.
Developing efficient training methods.
- Small business owners spend an average of 38 hours each month training new employees.
- 47% of those owners have trouble finding time to train existing employees to handle training.
Lowering the cost of hiring and training.
- Retailers spend an average of $2,700 to train a new employee.
Employment experts say there are several ways businesses can find good employees even in a competitive job market.
Show Them the Money
Offering higher wages is usually the easiest way of finding employees. As of June 2021, Bank of America’s minimum wage was at $17 an hour. Amazon, Best Buy, Charter Communications, Disney World, Facebook, Google, Starbucks and Target were among the companies offering $15 an hour.
The federal minimum wage is $7.25 an hour which was set in 2009, and 15 states still use that as their standard. Seven other states have no minimum wage laws.
With health care benefits constantly rising and the cost of products swelling thanks to import tariffs and supply chain issues, paying employees a challenge for small businesses with smaller margins. However, with the cost of replacing an employee running approximately 33% of their annual salary – $15,000 for a worker earning $45,000 per year – increasing wages to retain current workers and attract new employees seems like a good idea.
An Indeed survey of 1,000 randomly selected small businesses shows that 37% of them are offering higher wages to find employees. However, higher pay isn’t helping every industry find employees. Despite recently raising starting wages, fast food giants like Dunkin, McDonald’s and others are struggling at finding employees. Many of those fast-food businesses are closing the doors during times they would normally be open due to a lack of staff. In the retail industry, customer service takes a hit because stores lack employees to stock shelves and wait on shoppers.
“Small business owners are struggling at record levels trying to get workers back in open positions,” said NFIB Chief Economist Bill Dunkelberg. “Owners are offering higher wages to try to remedy the labor shortage problem. Ultimately, higher labor costs are being passed on to customers in higher selling prices.”
The Benefit of Benefits
More pay isn’t the only carrot many potential employees may want. Flexible hours, open paid time off (PTO) policies, childcare, continuing education, an opportunity for advancement, and other benefits are often just as important to workers as top-level salaries. Small business owners can get creative and offer benefits some larger companies can’t.
Here are some great employee benefits offered by American companies and small businesses:
- Housing assistance or provisions.
- Professional development stipends.
- Paid leave for new parents.
- Unlimited vacation days. Some employers feature jobs with unlimited, and sometimes required, vacation days.
- Dog-friendly workplaces. San Francisco game developer Zynga, which has a dog in its logo, allows employees to bring their furry friends to work every day.
- On-site workout classes.
- Catered lunches throughout the week.
- Free beer on Fridays.
- Free season ski passes.
- Midday surfing. Patagonia’s corporate headquarters in Ventura offers company bikes, volleyball courts and daily surf reports for employees who want to catch a wave at lunchtime.
Sell Company Culture
There are plenty of great places to work both home and abroad, and in the age of startup businesses of all kinds, these smaller, more agile and flexible companies offer new hires an opportunity to have an impact and make a difference.
For small businesses to compete with the big-box behemoths for top-notch employees, human resources experts say they should sell them on their company culture and what a great place they have to work. Businesses located in areas with great skiing, hiking, biking, rivers, lakes, or beaches can use those resources as additional perks.
Those kinds of activities are also often ingrained in the culture of many small companies which have corporate softball, cycling, or running teams or groups. Some companies organize group ski vacations, trips to ball games, concerts, or festivals to further develop their culture and cohesiveness.
Often, it’s not all about cash.
Another way to stand out from the crowd of recruiters is to be as flexible as possible with working conditions. Four-day workweeks are an attraction for some people. Many companies allow employees to work from home if their job allows it. A combination of in-office and at-home work is another effective recruiting tool.
Retail merchants often hire lots of part-timers to work shifts to cover business hours that run anywhere from eight to 12 hours. While that may work from a management standpoint, it can also create workers who aren’t invested in their employer’s business success. Part-time workers might be working several jobs to make ends meet which usually isn’t good for mental health or company morale. Full-time employees tend to be more fully engaged in their jobs and ultimately the success of the business.
For companies seeking part-timers to fill shifts, retirees, disabled individuals and other people looking for supplemental income can plug holes in your schedule. It often depends on if you can make their work hours fit their needs and lifestyles.
In the current job market, finding qualified or even capable applicants can be challenging, but several strategies can make finding a keeper easier.
Write good job descriptions. A Wall Street Journal report says how help-wanted advertisements are written has a significant bearing on worker success. A study by North American researchers cited in the report shows that advertisements focused on what a company can do for a job candidate are more successful than ads that listed job responsibilities and expectations, as most help wanted ads do.
Use teamwork. Business owners who are happy with their current employees can use them to find new teammates. Referrals from your best employees are valuable because they already know what it takes to work for you, and they aren’t likely to refer somebody they don’t think can do the job. Merchants can encourage referrals by offering incentives such as signing bonuses or paid time off for finding a successful candidate.
Consider your customers. Small business owners often know their customers by name, and if they’re enrolled in a loyalty program, they often know more than just names. They know their address, phone number, email address, and purchase history. That intimate knowledge and established rapport makes loyal customers possible recruits or, at least, good sources for referrals.
John Sullivan, a human resources expert and author, suggests a light-hearted and more creative approach to hanging a Help Wanted sign in your business. Instead, consider one that says: “If you like shopping here, maybe someday you’d like to work here.” He also suggests encouraging employees to wear buttons or T-shirts that say: “Ask me about what it’s like to work here.”
Look to the past. Sometimes it doesn’t hurt to consider past employees or job applicants to fill open positions. Often people leave jobs for reasons outside the workplace, and they might consider returning because their circumstances have changed. Likewise, if you had an applicant who didn’t quite make the cut during the last round of hiring, give them another shot. Both these situations demonstrate why it’s important to keep resumes and applications on file.
Give them tools to succeed. There’s an old business axiom that within the first six months of work, approximately one-third of a store’s new hires will quit. Setting new hires up for success with consistent processes and the right equipment reduces the chances of losing employees.
A point-of-sale system (POS) that is easy to learn, teach and use is essential. They also make it easier and more enjoyable for employees to do their jobs.
“A system with a user-friendly interface makes it easy for anyone, even those apprehensive about using a computer, to become productive after minimal training,” says Dan Nesmith, founder and president of Paladin Data Corporation, a leading provider of retail technology solutions.
Closing the deal
In the wacky job market that has prevailed since the outbreak of the pandemic, sometimes employers must move quickly on a candidate. Office Vibe reports that even though it takes an average of 27 business days to make a new hire, the best job candidates are often off the market within 10 days.
Ultimately, though, employers must consider a candidate’s personality as much as their job skills. How well a candidate fits in with the current workforce is crucial in maintaining esprit de corps.
In the past, employers could be choosy about the people they hired. Today, with roughly 9 million jobs unfilled, it takes a marketing effort and bidding process to land a new hire. Sometimes it might feel like trying to find a needle in a haystack. With proper planning and execution, finding employees for your organization is possible.