Many companies that hire thousands of seasonal workers will be entering the holiday season during the most competitive job market in decades. It's unlikely that they'll have enough workers to fill their needs. It could mean that holiday shoppers will have a less enjoyable shopping experience with empty store aisles and longer delivery times.
There are many job openings, which allows job seekers to choose where they work. At the end of August, there were 10.4million job openings, compared to 11.1million the month prior. This is the highest number since December 2000, when government began recording this figure. The Labor Department also reported that August saw a jump in the number of people quitting work to 4.3 million, up from 4,000,000 in July.
Employers were desperate to hire workers even before the holiday season. They raised their pay to $15 an hour and started offering sign-on bonuses in four-figure amounts. However, this was not a successful strategy. Employers will likely turn to their existing staff to do more overtime if they are unable to find the workers they require in time for the holidays. This can lead to costly business losses and worker burnout.
Matt Lavery, UPS's global head of sourcing, and recruiting, said that he has never seen a market as vibrant as this. He has been working on the hiring side for UPS for over 24 years. When you talk about people who are on unemployment benefits, you usually see surges of candidates. These are not the cases.
In September, Enhanced unemployment benefits ended. They included a $300-per-week federal supplement and programs that covered gig workers as well as people who had been jobless for six months. This cut aid to approximately 7 million people. However, it appears that the end of these programs has not had any effect on the number looking for work.
UPS has a new strategy to quickly hire workers. If it takes too long to hire, applicants may leave the company. The company is now able to do all the hiring online, with almost no interviews.
Companies can suffer from a shortage of workers. FedEx reported that it spent $450 Million between June and August because of higher wages, overtime payments and other costs associated with the tight job market.
FedEx employs about 65% of its staff at one of its hubs located in Portland, Oregon. FedEx has diverted about 25% of packages that would normally flow into other hubs that can handle them. FedEx Chief Operating Officer Rajesh Subramaniam President stated that more than 600,000 packages per day are being diverted, which is causing worsening service. He spoke to investors during a conference call last month.
FedEx stated that it will need 90,000 holiday workers in the coming year. This is 20,000 more than last. Other companies are hiring at the same level as last year: Amazon and UPS, Walmart, which each currently aims to hire 100,000 or more.
A potential problem is President Joe Biden's September announcement that employers who employ more than 100 people will be required to offer weekly testing or mandate vaccinations. It is not clear when these rules will be implemented or how they would impact hiring. High vaccination rates have been reported by companies that have mandated vaccines. A fully vaccinated workforce can make an employer more appealing to workers who are afraid of contracting the virus. Some employers worry that this mandate could make it harder to hire workers.
Many wonder if employers who need holiday help will have the resources to find workers on time.
Andrew Challenger, senior vice-president at Challenger, Gray & Christmas, stated that "it doesn't look very good." He predicted that retailers would add 700,000 workers to their holiday sales this year, which is 36,000 less than last year.
According to Indeed, seasonal job seekers searched for work 13% less in the week ended Oct. 10 than a year ago. These searches were also down 27% compared to 2019, when the pandemic started.
AnnElizabeth Konkel, economist at Indeed, stated that "the job seeker interest in sluggish." It's not taking off.
People who are already employed in warehouses, packages delivery companies or stores may be able to work longer hours.
Target stated it will hire 100,000 holiday workers in 2018, about 30,000 less than last, but will offer 5 million hours to its existing workforce. This could potentially add $75 million to workers' paychecks. Target employees work nearly 15% more than last, but the retailer stated that they are still asking for more hours. Target already pays its workers at least $15 per hour. However, the retailer plans to pay $2 more an hour to employees who work weekends or other busy days close to Christmas.
Craig Rowley works in the retail and consumer goods department at Korn Ferry. He said that if employers don't have the right workers, online orders will take longer as there won't enough people to pack them or deliver them. This is especially true with Christmas approaching and more shoppers going online. Retailers will likely eliminate late-night or overnight hours as they want their staff to work during peak hours.
Rowley stated, "You won't see the wild extended hours because staff can't staff them."