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US Retailers Hesitate to Hire More People for Busy Holiday Season

New UKG Report: Retail Stores Predicted to be Seriously Understaffed

Holiday season hiring trends

American retailers remain reluctant to hire more workers for the holidays during the busiest time of the year for stores in the face of deepening economic uncertainty, but the shortage in staffing can also be attributed to a growing lack of interest among workers to take on retail jobs, according to a new report from human resources (HR) and workforce solutions provider UKG.

In its third annual retail holiday season survey and trend report, UKG finds that 80% of US-based retail stores have been struggling to meet sales goals this year because they are short-staffed, up from 68% in 2021. As a result, customers will likely feel the impact of these labor challenges when shopping for the holidays, the report notes. The staffing problem is acute enough to the point that almost all retail stores will be understaffed at least once a week throughout the holidays. To help fill labor gaps during their busiest months, 77% of retailers plan to tap gig workers, and on-demand talent could represent up to 14% of the total in-store workforce for retailers during the 2022 season.

Given the inadequate staffing conditions, 36% of retailers altered store hours this year, and nearly 1 in 5 say their stores were understaffed at least half the time in August. Overall, close to two-thirds of retailers are sensing that workers do not see retail as an attractive place for employment any longer, their reluctance fueled by workplace concerns on health and safety, retail theft, hostile customers, and the violence of guests on sales associates.

Related Article: Is Cutting Customer Service the Answer for Companies to Cope with Rising Inflation?

The report also says that workers are abandoning retail because they desire increased pay and greater flexibility. In particular, job seekers increasingly want the flexibility to work on the shifts that they want—an unmet demand that the survey says points to numerous opportunities available to retailers as they seek to attract and retain talent.

The shortage in staffing is playing out against a tumultuous economic backdrop, with markets in the US and abroad roiled by current galloping inflation, persistent disruption in the global supply chain of goods and components, and the prospects of a full-scale worldwide recession about to inflict more pain on besieged, pandemic-weary consumers. 

Hesitation on Hiring Persists

The holiday shortage of workers is compounded by the hesitation of retailers to hire more people during their busiest season. Just 40% of respondents say their stores are hiring seasonal workers for the holidays, and 35% will recruit fewer seasonal workers this past year. One-third of retailers are scaling back all hiring in stores for the remainder of 2022, and more than a quarter are actively taking steps to reduce headcount today.

Ironically enough, more than 90% of retailers in the study agree that employees are instrumental to bringing shopping experiences to life.

“Understanding why people are gravitating away from retail work or leaving their employer in search of a better alternative is the first step toward fixing the workplace experience and developing a safe and comfortable environment for employees to work and customers to shop,” says Rob Klitsch, director of the retail, hospitality, and food service practice at UKG. “Employee experience determines customer experience, so to improve the latter, retailers must address their people’s needs first.”

Bringing exceptional experiences to life simultaneously for managers, employees, and customers is vital year-round, Klitsch adds. “The key is to listen, adopt, and adapt quickly, because the future of work is now,” he concludes.

The UKG report is based on the results of a survey conducted online between August 31 and September 9, 2022, among a pool of 305 store managers, owners, and executives representing US-based retailers spanning numerous industry segments, including big-box retailers, department stores, drugstores, and others specializing in apparel, electronics, furniture, home, luxury, discount, and sporting goods. Approximately one-third of retailers surveyed have more than 25 stores, 56% employ in excess of 500 employees, and 42% operate a distribution center or warehouse.

Author Information

Alex is responsible for writing about trends and changes that are impacting the customer experience market. He had served as Principal Editor at Village Intelligence, a Los Angeles-based consultancy on technology impacting healthcare and healthcare-related industries. Alex was also Associate Director for Content Management at Omdia and Informa Tech, where he produced white papers, executive summaries, market insights, blogs, and other key content assets. His areas of coverage spanned the sectors grouped under the technology vertical, including semiconductors, smart technologies, enterprise & IT, media, displays, mobile, power, healthcare, China research, industrial and IoT, automotive, and transformative technologies.

At IHS Markit, he was Managing Editor of the company’s flagship IHS Quarterly, covering aerospace & defense, economics & country risk, chemicals, oil & gas, and other IHS verticals. He was Principal Editor of analyst output at iSuppli Corp. and Managing Editor of Market Watch, a fortnightly newsletter highlighting significant analyst report findings for pitching to the media. He started his career in writing as an Editor-Reporter for The Associated Press.

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