on May 13, 2021 Retail Insights

As Consumers Return to Retail, Stores Scramble to Service Them

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Weekly jobless claims are reportedly at a pandemic-era low just this past week, which would seem to indicate a return to employment for many Americans. On the contrary, the Bureau of Labor Statistics reports that 9.7 million Americans are actively seeking work. Companies are reporting significant labor shortages, particularly in the retail, restaurant and service industries. Take a drive through any American town and it’s hard to miss the “Help Wanted” and “Apply Inside” signs posted at many establishments.

Some predict that the labor force is unlikely to recover to its previous form. "There's no guarantee that the people whose jobs have been permanently eliminated will be able to find work elsewhere," Nancy Vanden Houten, lead economist at Oxford Economics, stated in an article recently featured in Business Insider. "At the same time, there's a risk that labor force participation won't return to what it was prior to the pandemic. We might still experience shortages of workers."

Some reports suggest that “fear is a main driver behind this labor shortage,” saying that many people don't want to risk returning to the workplace and contracting COVID-19. Additionally, there are other factors to consider, including the three listed below:

1. Unemployment benefits are a disincentive. In other words, if unemployment gains are exceedingly plentiful, workers may not go back to the job because they are earning more increased money simply from government assistance. Enhanced jobless benefits, including a government-funded $300 weekly supplement, offer greater net income than many retail, restaurant and general labor positions. The benefits were extended until early September as part of a $1.9 trillion COVID-19 pandemic relief package approved in March.

2. At-home care is still needed. Challenges still remain in the area of child care, as in-person classes remain limited in many school districts. For those families whose children have returned to in-person classes, whether part-time or all day, that transition will still come with challenges that can interfere with a parent’s ability to keep commitments at work. Seeking remote work from home may be more appealing to single-parents or families with multiple children and varying schedules. According to Alyssa Johnson, vice president of global account management for Waltham, Mass.-based Care@Work, which provides employers with benefits programs to help workers care for children, seniors, pets and their homes, "New caregivers, new schedules and new after-school programs all require a period of adjustment that working parents are balancing with their [job] responsibilities.”

3. Some workers may be holding out for higher wages. With a labor shortage in play, some workers are seeking higher earnings, bonus offerings, hourly wage incentives and expanded benefits. For small and medium-sized retailers, this may mean losing workers who are opting out to winning jobs in the giant companies that can withstand necessary increases. For instance, according to the story previously referenced in Business Insider, Costco recently raised its minimum wage to $16 per hour, and Target and Amazon have raised their wages to $15 per hour.

So, what can companies do to maintain the workforce required to best serve the customer?

1. First, it goes without saying that repurposing mere head-counts, retraining and redirecting your existing team is worth a hard look. Employees with strong work ethic and with company history are great candidates for lateral moves, diversified responsibilities and/or on-the-job training as you stretch to meet consumer demand.

2. Secondly, in the absence of an internal HR team, consider bringing in a consultant and/or recruiting agency to help accomplish two key objectives:

a. Fill open positions (freeing you up to stay on task at work)

b. Assist employees in adapting to change.

3. To the degree that it’s feasible, offer hiring bonuses, long-term incentives such as "performance-related” bonuses, and last but not least, raise hourly pay rates in order to compete in this hiring market.

Undoubtedly, we all look forward to the reopening of America, and to see our independent and mid-sized retailers, our business partners, and communities prosper. As we push through this latest post-pandemic consequence, the good news is that there are signs of good things to come. After countless hours spent inside and online in the last fifteen months, consumers are getting out of the house and seeking to dine, shop and be entertained in-person. This fact has the power to drive us forward to better days ahead.

Chris Bull

Chris Bull is currently a Principal and the President at Spectas. As a Business Development Professional, Executive Leader and Owner in Retail Marketing, Chris has had the privilege of working with and for some of the most iconic brands and retailers in the world.