For WorldatWork Members
- Enhancing Retail Workforce Performance with a Real-Options Approach, Journal of Total Rewards article
- Fighting the War for Frontline Talent, Workspan Magazine article
- Equity Is a Critical Factor in Attracting and Retaining Frontline Talent, Workspan Magazine article
- How to Support Employees Whose Work Can’t Flex, Workspan Magazine article
For Everyone
- Sign-On Bonuses Can Play Pivotal Role in Attracting Seasonal Staff, Workspan Daily article
- Strategies for Attracting and Retaining Frontline Workers, Workspan Daily article
- Frontline Workers Less Likely to Seek Mental Health Help, Workspan Daily article
The holidays are right around the corner, and frontline managers are gearing up for perhaps their companies’ busiest season yet. The challenge will be how to find good seasonal workers to meet corporate and customer needs, according to a new report from Axonify.
In its survey of 450 U.S. retail, hospitality and food-service frontline managers, the software company found nearly half (44%) are hiring more new seasonal workers this year than last year because they need additional support. Seasonal workers are critical to delivering consistent customer experience and reducing burnout in full-time staff during times of peak demand, according to the research.
Yet, complicating this hiring urgency, 61% of respondents said applicant quality has worsened, specifically regarding skill set, professionalism and job-related experience.
“Seasonal hiring ebbs and flows, but regardless of any industry or labor market trend, properly trained workers will always be the backbone of seasonal work,” said Carol Leaman, Axonify’s co-founder and CEO. “The problem frontline managers are facing now is that high-quality talent is becoming consistently harder to find, which is in part why understaffing is the number one issue keeping them awake at night.”
A Cooling Labor Market
While some companies like Amazon, Target, Bath & Body Works and JCPenney are holding steady or increasing their number of seasonal hires, others such as Dick’s Sporting Goods and Macy’s have scaled back hiring goals.
Based on data from the U.S. Department of Labor’s Bureau of Labor Statistics, executive outplacement firm Challenger, Gray & Christmas countered Axonify’s report with a softer market take that predicted 520,000 hires for retail employers in Q4. While still generally robust, that figure is the second-lowest total of seasonal hires since 2009 and a drop from 564,000 in Q4 2023.
“One possibility is retailers will be unable to fill positions, which has proven true in the post-pandemic years,” said Andy Challenger, the senior vice president at Challenger, Gray & Christmas.
Besides candidate quality, Challenger pointed to a cooling labor market and tightening consumer spending as reasons for a hiring conundrum.
“Retailers should have their pick of workers this season, but it remains to be seen if demand, as well as innovations in AI [artificial intelligence] and automation, will necessitate a large workforce,” Challenger said. “Ultimately, while inflation and the labor market continue to cool, major seasonal employers are announcing significant hiring plans to meet anticipated consumer demand. The real tell will come in November, when retailers have a month to assess how shoppers are trending.”
This season’s holiday hires will increasingly fill gaps at e-commerce fulfillment centers. Deloitte recently reported e-commerce will account for much of the sales growth this holiday season, projecting a 7% to 9% increase in online shopping.
“This year’s hiring strategy has shifted toward recruiting skilled talent for critical roles for operational success, such as e-commerce fulfillment positions,” said David Kopsch, retail and consumer goods leader at Mercer. “Despite this shift, we are witnessing a decline in the number of seasonal frontline worker hires compared to previous years, signaling a strategic emphasis on quality and skill over quantity in response to ongoing labor market tightness.”
Pay Continues to Reign
When it comes to attracting competent and available seasonal talent, pay is the number one factor, Leaman said.
“Although benefits and other perks can help a company stand out to candidates, a competitive salary or hourly pay rate is usually what they gravitate toward first in job listings or interviews,” she said.
Nearly half (49%) of frontline managers in the Axonify survey said they have bumped up the pay rate for the same seasonal positions this year to help attract talent.
This data aligns with Mercer’s U.S. Retail Compensation & Benefits Survey, which tracks an overall increase in wages across the retail sector.
Not only is pay still king, but companies are considering a broader range of benefits to attract seasonal workers, Kopsch said.
“Many organizations are exploring options such as flexible work schedule arrangements and more financial well-being support,” he said. “There is a trend toward more comprehensive benefits packages, reflecting a shift in employer priorities to not only attract talent but also to retain them in a competitive job market.”
One example is Amazon’s recent announcement that its anticipated 250,000 holiday hires for customer fulfillment and transportation operations roles will have access to healthcare benefits after 90 days of employment.
Axonify’s survey also found companies are prioritizing secure and safe work environments, including mental health support (77%), flexible hours (70%), and increased upskilling and training opportunities (43%) for new employees.
“Employee engagement can directly impact productivity and talent retention, so it’s essential for frontline managers to do all they can to keep morale high,” Leaman said.
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