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Seasonal workers have more choices this year – so employers will have to keep them happy

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Holiday hiring and Holiday market

A "now hiring" sign is seen at Bath & Body Works in the Boulevard Mall in Amherst.

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Will there be enough registers open when consumers try to cash out this holiday season?

That depends on how much luck retailers have with their seasonal holiday hiring.

Experts are projecting a slightly smaller need for holiday seasonal workers compared to last year, but that doesn't mean retailers are having an easy time filling those positions.

The tight labor market and increased wages are a challenge for retailers hiring for the holiday season.

Part of the reason is a shrinking pool of available workers. More baby boom-era workers are aging out of the workforce. Others have dropped out of the workforce for reasons from child care difficulties to a renewed respect for work-life balance.

And while there used to be a dependable segment of retirees who would come out of retirement to work for the holidays – the specter of Covid-19 has fewer of them willing to do so.

What's more, employers are competing against all industries for workers, as the labor shortage universally plagues all segments of the economy.

Employers that do snag workers will have to be on their best behavior to keep them, experts said. It is all too easy for workers to jump from one job to another if working conditions aren't right or if better wages and hours are available elsewhere.

This year, the majority of retailers are looking for the same amount of holiday help as last year or more, according to goTRG, a Florida-based global logistics firm. Amazon is looking to fill 150,000 positions, up from 125,000 last year. Target and UPS are each looking for 100,000 workers – the same as last year. Walmart is looking for just 40,000 workers, compared to 150,000 last year.

All told, retailers will hire about 680,000 workers nationally this holiday season, predicts outplacement firm Challenger, Gray & Christmas; slightly less than last year's 701,400 people.

The smaller need for seasonal hires could mean that companies have gotten better at doing more with less, that customers have been more accepting of thinner staffing, or that some employers have gotten better at retaining year-round workers.

"It’s important to understand the context," said Jimmy Carter, a Walmart spokesperson.

Walmart is heading into the holiday season with a higher head count on staffing than it did last year, he said. 

"Like in previous years, we’ll give our current associates the first opportunity to work additional hours if they want to earn extra money for the holidays," Carter said.

That means fewer seasonal workers are necessary.

"From there, we’ll strategically hire seasonal associates to help with the busy holiday season – and that number will vary from store to store depending on each store’s individual needs," he said.

Holiday hiring is well underway in Western New York and will continue throughout the season to keep positions filled.

With the unemployment rate at 3.9%, employers haven't had such a hard time finding help since 1990. 

In their fight to attract workers, employers have tried to sweeten the pot, said Timothy Glass, labor market analyst with the state Labor Department in Buffalo. One way they're doing that is to offer more money.

"Employers have been raising their starting wage that they offer to job seekers," Glass said.

The current non-tip minimum wage locally is $13.20 per hour for all workers except fast food workers. Fast food workers at establishments with more than 100 workers pay a minimum of $15 per hour.

"Most employers are offering above the minimum wage for all workers, and some above the minimum wage for fast food workers and still having a hard time attracting and retaining employees," Glass said. "This also seems to be true across all industries."

Department store Kohl's is offering seasonal retail associates $14.25 per hour, according to its job listing on Indeed.com. Mr. Olivewood, a purveyor of wooden gifts and keepsakes, starts its retail associates at $13.59, but will pay as much as $15.46 hourly. Macy's starts at $15 and pays as much as $18 per hour.

"Employers will have to find different ways to attract employees like bonuses or discounts on merchandise," Glass said.

And many have done just that.

One thing has remained constant through the past decade: Consumer spending continues to climb. Despite all of retailers' worries through times of recession, pandemic and inflation, consumers have kept spending. But this year plenty will be different.

Retailers have gotten creative – and more generous – with incentives outside of pay.

Bath & Body Works offers free products in addition to its merchandise discount. Urban Outfitters increased its merchandise discount to 60% off. And Nordstrom Rack is offering health insurance, including vision and dental, as well as life insurance, along with its $15 to $15.60 hourly wage.

The more attractive incentives have workers looking outside their usual industry for opportunities.

"Before the pandemic, workers generally stayed in their field when looking for a new job. Retail workers stayed in retail, and manufacturing workers stayed in the manufacturing industry," Glass said. "This no longer seems to be true, as workers are now looking for a job that best fits their needs regardless of type of job."

The pandemic prompted workers to take a closer look at their work-life balance. It has led workers to make more strategic choices that help them achieve the type of lifestyle they have re-envisioned for themselves. It has changed what workers are looking for and what jobs they're taking.

Employers are adapting. They're wooing applicants from other fields, and working extra hard to retain workers in their own industries.

"Employers are not only competing with others in their industry, but now across most of the other industries," Glass said.

Seasonal workers will have more opportunities for overtime this year, but will be expected to work harder to pick up the slack for their missing colleagues. Still, employers will be smart not to push workers too hard.

"This could be a potential problem for employers who want more productivity from their workers, but must balance that with overworking and alienating them to the point where they quit," Glass said.

And they're more likely to quit than they have been in a long time. 

"Job seekers will have a greater discretion in the type of job that they would accept for the wages offered," Glass said. "Their choices will be more numerous than in the past, and they can pick and choose employers."

It has been a while since workers have had so many options.

"This is one reason why the quits rate for employees is still elevated from historic norms nationwide," Glass said.

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