Home Retailers Expect Strong Holidays Despite Labor, COVID-19 Concerns
October 5, 2021
Retailers Expect Strong Holidays Despite Labor, COVID-19 Concerns
Posted In: Retail Articles
NRF Upgrades 2021 Retail Forecast After Strong First Half

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Even with all the macro pressures in the marketplace, including COVID-19 and labor shortages, retailers remain optimistic even for what they recognize will be a bumpy 2021 holiday shopping season.

A survey of retail managers and executives commissioned by the Ultimate Kronos Group, an HCM, payroll, HR service delivery, and workforce management services provider, revealed some labor anxiety but also ways that it might be addressed. Retailers responding to the survey worried that 2021 could be the worst holiday hiring season in memory, with 63% sharing that concern, although the overwhelming majority expressed confidence they could deliver a positive experience for shoppers, at 94%, and employees, at 93%.

The retail sector continues to see the strongest recovery across all U.S. industries in terms of hourly shifts gained month over month, UKG asserted but that doesn’t mean they can make everyone happy. Indeed, 75% of retailers stated that shopper expectations are still higher than what stores can deliver. Although the National Retail Federation projects that in-store retail sales could top $3.35 trillion this year,  up from $3.10 billion in 2020, employee shortages and turnover have left 68% of retailers struggling to staff up enough to meet sales goals.

Just over one in four retailers expect holiday season staff shortages and unplanned absences to result in daily understaffing, the survey revealed. Many cite demands for higher pay and health and safety concerns as the top reasons stores are struggling to attract workers, UKG noted. Retailers also blamed a stressful work environment, with 88% worried about employee burnout, for at least a part of their labor woes. Not infrequently, they asserted, job seekers really want greater flexibility from an employer, which can constitute a problem, especially during the holidays.

Although 63% of retailers say they’ve raised pay for holiday hires, with an average increase of $3.90 per hour, year over year, strong demand for seasonal staff is making it more challenging than ever for retailers to compete in terms of pay, benefits and hiring incentives.

Seven in 10 retailers made direct, long-term investments in their people in 2021 by raising wages or offering innovative and impactful benefits, according to UKG, with others having committed to providing schedule flexibility, job stability and development opportunities.

Of retailer’s surveyed, UKG indicated:

  • 75% cross-train associates to function in multiple roles
  • 56% provide professional development to help workers advance within the company
  • 54% engage in labor sharing, giving employees the option of working across multiple store locations
  • 54% guarantee workers a minimum number of scheduled hours per week
  • 40% accommodate employee availability and preferences when building work schedules

With COVID-19 still a concern, retailers are addressing consumer trepidations by bolstering contactless systems and safeguards, at 81%, and putting managers in charge of enforcing store safety policies. The great majority of retailers, at 88%, think that customers, if given the choice, prefer to shop with as little contact as possible. At the same time, 90% of retailers expect in-store fulfillment will be even more popular this holiday season than in 2020.

For safety’s sake,  74% of retailers said they would require employees to wear masks in stores. Mask mandates for shoppers have become more likely, too, with 45% of retailers already requiring face coverings for customers entering some or all of their stores. Another 40% said it’s extremely likely they will require customers to mask up in at least some stores once the season kicks off. Still, 40% of retailers surveyed expected coronavirus cases among store staff to be infrequent or non-existent this year, and 97% said store managers would know exactly what to do if an employee tests positive.

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