DIpil Das
What’s the Story?
Our The 12 Weeks of Holidays 2021 series counts down to this year’s holiday peak with new thematic research each week. In this report, we discuss key developments related to holiday hiring in US retail.Why It Matters
The 2021 holiday shopping season will likely see the continuation of heightened e-commerce driven by the pandemic, particularly with the ongoing threat of the Covid-19 Delta variant. To bolster supply chain operations to effectively meet online demand, many retailers will need to hire more workers, as will sectors allied to retail, such as shipping, transportation and logistics. Pandemic-related consumer concerns mean that retailers must ensure they create a safe shopping experience for customers that do visit brick-and-mortar stores—additional personnel may be needed to carry out tasks such as temperature checks and disinfecting shopping carts, for example. Consumer expectations for safety and convenience are also seeing the popularity of alternative, contact-light fulfillment options such as BOPIS (buy online, pick up in store) and curbside pickup; a holiday-driven surge in the use of such services will require extra staff. However, retailers will have to navigate through a tighter labor market this year. Due to labor shortages, we are seeing companies implement measures to attract workers, such as investing in marketing campaigns, hosting retail-specific job fairs and offering monetary incentives including increased hourly wages and bonuses—but we expect the battle between logistics firms and retail companies to be tight.Hiring in US Retail for Holiday 2021: Coresight Research Analysis
A Bleak Job Market for Employers: The Gap Between Job Openings and Hiring There were about 1,186,000 retail job openings (seasonally adjusted) in the US at the end of August 2021 (preliminary data), 61.5% more than the 734,000 openings at the end of August 2020, according to the US Bureau of Labor Statistics. However, the number of retail hires in August 2021 (911,000) was 1.2% lower than in August last year (922,000). This gap is a worrying sign for retailers looking to hire for the holiday season. Although the unemployment rate in the retail industry has declined since the beginning of the year (see Figure 1), it is still higher than pre-pandemic levels. In August 2021 (latest available data), the unemployment rate in US retail was 6.5%, compared to 4.2% in August 2019. Exacerbating the labor woes, employee retention for retailers has been a growing concern. The number of workers who quit their jobs in the retail sector saw a massive year-over-year jump in August 2021 (latest available data), to 721,000 from 505,000 in August last year. Many retailers are scrambling to retain their employees, offering monetary incentives and other assistance programs.Figure 1. Unemployment Rate in the US Retail Trade Industry [caption id="attachment_134607" align="aligncenter" width="725"]
Source: US Bureau of Labor Statistics[/caption]
Heightened Focus on Supply Chain Hiring Driven by E-Commerce Rise
Many US retailers have begun to announce holiday hiring plans, among which we are seeing increased demand for workers compared to last year.
Coresight Research has so far tracked announced plans by US retailers to hire 686,000 workers. Looking at only those retailers that have announced such plans for 2021 so far, we have seen a very substantial increase in holiday hiring requirements, of 61.72% (261,826 additional job vacancies), compared to 2020—and a 12.9% increase (78,300 vacancies) compared to 2019.
We present seasonal hiring announcements by selected retailers over the past few years in Figure 2, and explore some plans in further detail below.
Figure 2. Seasonal Hiring Announcements by Selected Retailers [wpdatatable id=1356 table_view=regular]
*Total includes announcements as of October 8, 2021 **Year-over-year percentage change is on a comparable-retailer basis of the companies that have reported their hiring plans Source: Company reports
- 1-800-Flowers.com announced on September 7, 2021, that it plans to hire more than 10,000 seasonal employees to support its continued business growth as it prepares to meet increased online demand this holiday season. The number of announced posts is in line with last year and will include full-time and part-time roles across high-volume areas such as production, gift assembly, distribution and operational support.
- Amazon announced on September 14, 2021, that it will add 125,000 jobs across the US with new roles in fulfillment and transportation where the average starting wage is more than $18 per hour and is up to $22.50 per hour in some locations. Additionally, on September 1, 2021, Amazon had announced hiring over 40,000 workers in corporate and tech roles in over 220 locations in the US.
- Dollar Tree announced on August 20, 2021, that it will hire about 35,000 staff before the holiday season, which include store managers, assistant store managers and distribution center leaders. Earlier in the month, the company organized a hiring event through which it offered its warehouse associates flexible schedules, competitive pay and an attractive benefits package. The company is also offering a $1,000 sign-on bonus.
- Kohl’s announced on September 13, 2021, that it would be adding 90,000 seasonal workers to meet demand and support company growth—the same as for holiday 2020. The positions are available across the retailer’s department stores, distribution centers and fulfillment centers, including its new e-commerce fulfillment center in Etna, Ohio.
- Michaels, the arts and crafts chain, announced on August 24, 2021, that it plans to hire staff for over 20,000 seasonal positions across its US and Canada stores and distribution centers, in preparation for the 2021 holiday season. According to a company statement, the retailer will offer competitive wages, flexible hours and a 30% employee discount.
- Target has decided to hire 100,000 workers for the holiday season, according to the company—24.8% fewer than last year. In a bid to attract workers, the retailer rolled out a new education program in August that will cover the cost of associate and undergraduate degrees at certain schools and also provide assistance in paying graduate school costs.
- Walmart announced on August 31, 2021,that it will hire 20,000 workers in the supply chain before the holiday season. The jobs will be both full-time and part-time but will be permanent positions that range from order fillers to freight handlers.
Figure 3. Seasonal Hiring Announcements by Selected Logistics Companies [wpdatatable id=1354 table_view=regular]
*Figures are only for specific regions, and not a nationwide hiring number **Total includes announcements as of October 8, 2021 ***Year-over-year percentage change is on a comparable-retailer basis and of the companies that have reported their hiring plans Source: Company reports
- FedEx announced on September 16, 2021, that it plans to hire 90,000 personnel—an increase of 28.6% compared to last year—with the majority of those being field positions such as package handler, operations manager, maintenance technician, forklift driver, customs trade coordinator and courier. These positions will be critical to the company’s success in meeting rising e-commerce demand. About 500 personnel will be hired in science, technology, engineering and mathematics (STEM) roles, which include positions such as full stack developer, data scientist and data engineer, according to the company.
- UPS announced on September 9, 2021, that it expects to hire around 100,000 seasonal associates, in line with its previous hiring plans for the holiday seasons in 2018 and 2019. The company is planning for full- and part-time seasonal positions to primarily comprise package handlers, drivers, driver helpers and personal vehicle drivers in various locations across the US.
- Radial announced on August 22, 2021, that it plans to hire more than 27,000 seasonal hires across North America—up 8.0% compared to announced hires in 2020. The company acknowledged that as e-commerce continues to grow, jobs in fulfillment and customer care centers are essential to the retail industry.
Figure 4. Jobs Added in Retail Trade for October through December, 2016–2020 [wpdatatable id=1355 table_view=regular]
Source: US Bureau of Labor Statistics