Why are retailers falling short of their hiring goals?


The retail industry has a labor problem. Companies are looking for more workers to fill positions in stores, warehouses and field and corporate offices while in many cases simultaneously dealing with an exodus of employees looking for better opportunities.
Record numbers of workers have been quitting their retail jobs in recent months, in some cases going to other retailers that pay higher wages — Amazon.com, Best Buy, Costco, Sam’s Club and Target, Wayfair all offer a current starting minimum wage of $15 an hour with others such as CVS and Walgreens planning to follow. Many other workers are finding opportunities in other industries, such as legal cannabis, that pay decent wages and have more worker-friendly schedules that don’t require working late nights or holidays.
A Washington Post article published last week reported that 321,000 Americans are now working in the legal cannabis industry. Jason Zvokel , who worked 15 years as a Walgreens pharmacist, fulfills cannabis orders for customers at a marijuana dispensary. He makes five percent below his previous pay but the hours are much better.
“I am so much happier,” he told the Post. “For the first time in years, I’m not miserable when I come home from work.”
According to a Wall Street Journal article published earlier this month, a Harvard Business School and Accenture study indicates that artificial intelligence (AI) technology used by companies to identify and hire workers more quickly could actually be getting in the way of jobs being filled.
More than 10 million workers are being excluded from hiring consideration by AI programs for a wide variety of reasons, such as gaps in employment. In some cases “ballooning” job descriptions by employers make it extremely difficult to create near exact matches in the automated search process.
Industry leaders like Amazon.com and IBM are examining the systems they use more closely to determine how they can be improved to resolve hiring bottlenecks. Some are just going old school and using people to handle more of the vetting process to avoid the perfect becoming the nemesis to achieving good hiring results.
“The typical recruitment strategies we use weren’t meeting the hiring demand,” Alex Mooney, senior diversity talent acquisition program manager at Amazon, told the Journal.
- Retail Workers Are Quitting At A Record Pace. But Stores Are Rapidly Hiring, Too – NPR
- Greener pastures: Marijuana jobs are becoming a refuge for retail and restaurant workers – The Washington Post
- Companies Need More Workers. Why Do They Reject Millions of Résumés? – The Wall Street Journal
- Does retail have an answer for its jobs problem? – RetailWire
- Can 14 and 15-year-olds solve the labor shortage? – RetailWire
DISCUSSION QUESTIONS: Are retailers’ hiring practices and operations up to the task of bringing on the quantity and quality of workers demanded at this point in time? What do you see as the weakest spots in retail hiring systems and what are your recommendations for resolving them?
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12 Comments on "Why are retailers falling short of their hiring goals?"
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Managing Partner, Cambridge Retail Advisors
Since the push at most retailers is to hire part time associates, the answer is pretty straightforward. Because of this, workers are forced to maintain two or sometimes three part time jobs. The retailers with systems that make it most convenient for their workers to manage their schedules remotely and the retailers that allow associates to bid on shifts will be the most successful in hiring. The ability to view and manage your schedule remotely and to bid on shifts posted are key elements for any retailer to have in their Workforce Management System.
Principal, Retail Technology Group
There are many reasons for falling short of hiring goals, and they are discussed daily on network and cable TV. This is like a perfect storm. Stimulus packages, changes in WFH patterns, people leaving the workforce, compensation and more are all converging to make it difficult for employers to find the amount of help they need. This problem will end when we finally reset in the new normal.
VP of Strategy, Aptos
Influencer, Consultant and Strategic Advisor
I totally agree that retail has become a crappy job. It is an industry based on maintaining a huge workforce that gets paid the absolute minimum retailers can get away with in terms of salary, benefits and quality of life. Examining the future of work has been a trend for at least a decade in several industries and now that time has come for retailers.
CEO, RMW Commerce Consulting
The massive crunch in this economy is from supply chain. Hundreds of thousands of workers who used to be in retail and restaurants are now in supply chain. And more to come.
Retail and restaurant’s only alternative is to keep raising wages and improving conditions until some kind of equilibrium is reached.
Chief Strategy Officer, Hoobil8
Retailers have lost touch with their job descriptions. Like the night before a big trip when we panic and start loading our suitcase up with random things we think we’ll need, the rapid evolution of technology, channels and shopper behavior has caused retailers to load up their job postings with unproductive skills. Like all other aspects of retail today, so much change has happened that the entire structure needs to be remodeled. And as job descriptions are re-thought, retailers need to ensure that these jobs offer staff not only salaries commensurate with the cost of living, but room for growth and an empowering work environment to build – and keep – great staff.
Managing Director, GlobalData
If people are leaving and retailers are having trouble recruiting maybe they need to look at their employment practices such as hours, wages and career advancement. This is now an employee’s market and employers must pull out the stops to attract and retain good people. As for AI filtering out people with gaps in their resumes: that’s plain stupid. Unless you know the reason for a gap you can’t possibly make an assessment of someone’s suitability for employment.
Editor-in-Chief, RetailWire
Someone I know very well with an advanced degree told me not long ago about their unfruitful job search where a help wanted description listed a dozen or so requirements to be considered for employment. She said that she’d be able to tick off 9, 10 or 11 of the 12 boxes but never as much as a follow up from the employers. I wonder now if an AI system looking for perfect candidates may have played a part. Fortunately, she has since found a job she loves and is no longer actively seeking new employment.
Retail Industry Strategy, Esri
President, Humetrics
The answer is simple. Most retailers have never developed a strong employment proposition. They can not give a potential employee real reasons why they should come to work for them rather than going somewhere else. Those like Costco and Apple do not have trouble finding, hiring, and retaining STAR employees. By the way, STAR employees are Self-motivated, Talented/trainable, Accountable, and Reliable.
Principal, Cathy Hotka & Associates
At last week’s meeting of the Store Operations Council, participants talked about what amounts to a culture shift for associates. Store personnel need predictable hours, flexibility, self-service options, higher pay and better training. Retail companies that cater to them enjoy longer tenures and better profitability. It’s the future.
Vice President, Research at IDC
The retail package is not attractive and is still looked upon as entry level, low-end work. Retailers need to change this perception to make it more appealing. There is no way up in retail either, making career pathing important to keep and hire people. Another option would be conversion to a trade and apprentice type of system, but this would suggest specialization — which would be a challenge in retail.
Potential retail employees know retail is not their dream job. Experienced workers don’t want to lose seniority in their stores and running the produce department. While newcomers to retail are dreaming of higher level job prospects. Options for Uber or Instacart have paved the way for scheduling and higher pay — though tempered by the pandemic. Retail as an industry needs to become good looking and needs to compete- like investment banking or high tech.