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‘It’s going to be a real battle’ to hire staff

September 23, 2018

Retailers won’t just be battling each other for customers this holiday season — they’re also gearing up to fight over the temporary workers who will make the sales.

A strong economy has retailers expecting a busy holiday shopping season, but with unemployment near historic lows, staffing up to handle extra demand could be a challenge.

“It’s going to be a real battle for these retailers to get the right labor in,” said Andrew Challenger, vice president of Chicago-based outplacement and executive coaching firm Challenger, Gray & Christmas.

Target plans to hire 120,000 people to fill seasonal jobs in its 1,839 stores, about 20 percent more than last year.

That matches the number of jobs Amazon announced ahead of last year’s holiday season and is the largest seasonal hiring estimate from a bricks-and-mortar retailer since Challenger, Gray & Christmas began tracking the figure in 2012. About 8,000 of Target’s jobs will be in the Chicago area, with another 1,000 elsewhere in Illinois. Target also is hiring 7,500 people to work in its distribution and fulfillment centers nationwide.

The retailer said it needs more seasonal workers to handle online orders from stores, such as in-store or curbside pickup or shipping items to customers’ homes. The company said it plans to hire nearly twice as many seasonal workers to fill online orders compared with last year.

FedEx also said it plans to hire more seasonal workers this year: 55,000, up from 50,000 in 2017.

Macy’s plans to hire about 80,000 seasonal workers, the same number it initially announced last year before adding another 7,000 holiday jobs in December. But fewer of this year’s group of holiday hires will be working in Macy’s stores. About 23,500 of the 80,000 jobs are in fulfillment centers handling online orders, up from 18,000 last year, the Cincinnati-based department store chain said.

Retailers have cut thousands of jobs while closing stores in recent years, but they’ve also created new ones in areas supporting growing online sales, such as fulfillment centers, logistics and transportation.

The workers losing jobs on the sales floor at closing stores aren’t necessarily the same ones getting new jobs in fulfillment centers, but more new jobs have been announced than cut, Challenger said.

There are fewer unemployed job seekers too — the nationwide unemployment rate was 3.9 percent in August, down from 4.4 percent during the same month last year — and there are signs retailers expect more competition for seasonal hires.

Some, like Kohl’s and J.C. Penney, began hiring seasonal workers significantly earlier than in prior years.

Wisconsin-based Kohl’s announced in June — about three months earlier than last year — that seasonal jobs were available at more than 300 stores. Additional hiring started at all stores, distribution and fulfillment centers in August, and Kohl’s has been holding hiring events in stores. Target and Macy’s have scheduled nationwide hiring events in October.

Challenger said he expects others to face off on pay and perks.

“Wages have been shockingly slow to rise for many years, and it’s hard to imagine some retailers aren’t going to have to raise wages to compete,” he said.

Target said all new hires would start at a minimum wage of $12 per hour and get store discounts. As a new perk, the retailer will randomly select one hourly worker at each store and distribution center to receive a $500 gift card and $500 donation to a local community organization of their choice.

“As the marketplace becomes more competitive, the significant investment we’re making in our team, including our increased minimum hourly wages, sets Target apart,” Stephanie Lundquist, Target’s chief human resources officer, said in a news release.

Kohl’s, which plans to hire more than 2,300 seasonal workers in the Chicago area, has competitive wages, a weekly pay schedule and certain days when employees get larger-than-usual discounts, spokeswoman Julia Markun said. Macy’s also said it gives seasonal workers competitive pay, merchandise discounts and the ability to earn quarterly incentives if they achieve certain goals.

It’s not clear how influential perks like giveaways and extra discounts are compared with hourly wages, but it suggests retailers are looking for ways to stand out, Challenger said.

“They’re getting creative because they have to figure out ways to get people in the door,” he said.

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