With no end in sight to pandemic-fueled labor shortages, longtime shop owner Bridget Quinn Stickline knew she could face a bumpy ride when she opened a new store concept in August.
Girlhero, a teen apparel store in Lutherville’s Green Spring Station, needed attentive store workers to succeed, but Stickline found her usual pool of college students diminished, with openings outweighing applicants. She believes they may have had more choices at restaurants or elsewhere this year as employers competed for workers.
Like many retailers, Stickline had to find alternatives. She began recruiting high school students, calling area schools and alerting customers. She turned to women who were looking to reenter the workforce after raising children. Much of her advertising was word-of-mouth. But the new store generated enough interest to fill staff at both Girlhero and her existing store, Wee Chic, also at Green Spring.
“We’ve had to pivot and do things differently, and it’s similar with hiring challenges,” Stickline said.
The hiring crunch in the U.S. has left employers struggling to meet demand and fill orders. Retailers, amid the critical holiday selling season, are reevaluating recruiting methods and looking for ways to stand out from competitors to attract enough workers and encourage the best to stay.
Some of the biggest retail brands have boosted starting pay and begun offering benefits not always available to entry-level and part-time workers.
Retailers are rushing to boost their minimum wages to as much as $17 an hour, incorporating more flexibility in work schedules and adding days off. And benefits are cropping up that could make retail a sustainable career. For instance, Macy’s, Ikea, Target, Walmart and others have rolled out debt-free higher education benefits.
“Companies continue to have a difficult time attracting and retaining workers, particularly for in-person, shift positions,” said Andrew Challenger, senior vice president of outplacement firm Challenger, Gray & Christmas Inc.
People are leaving jobs because of burnout and a desire for more flexibility, and sometimes even higher pay isn’t enough to stop them from leaving or looking elsewhere, he said.
Job openings spiked to 11 million, the second-highest level on record, on the last day of October, the U.S. Labor Department reported Dec. 8. Retail jobs accounted for 1 million of those openings. The government’s monthly Job Openings and Labor Turnover Survey also showed a decrease in hiring amid labor shortages and that 4.2 million workers quit jobs.
Seasonal hiring among retailers plunged 9% in October compared with the same month in 2020, the Bureau of Labor Statistics said. As hiring decreased, retailers seeking seasonal workers put out more than 940,000 hiring announcements, the highest number since Challenger began tracking such announcements in 2012.
Companies are touting their benefits packages.
Target says it is offering store employees more pay, flexibility and reliable hours this holiday season, and spending more than $75 million to offer more than 5 million additional hours to existing workers. It’s also paying premium rates during peak times in stores and distribution centers.
The retailer’s new college benefit, for full-time and part-time workers at stores and warehouses, covers undergraduate and associate degrees from more than 250 business-aligned programs at more than 40 schools, colleges and universities, including Oregon State University, Morehouse College and Cornell University. No Maryland schools are included.
Last month, Macy’s announced that it too would offer a tuition benefit program and raise its minimum wage to $15 an hour and beyond.
The department store chain plans to invest about $35 million over the next four years to cover 100% of tuition, books and fees for any of its 75,000 U.S.-based, regular salaried and hourly workers, starting in February. The retailer has not yet named specific schools but said a network of options would include high school completion, college prep, English language learning, associate and bachelor’s degrees, boot camps and professional certificates. A spokeswoman said programs will be offered in retail management, supply chain, data & analytics, digital, technology and other areas.
The company also will add a flexible paid holiday for all corporate and hourly workers and will raise the minimum wage at all department stores by May, bringing average base pay above $17 an hour and average total pay to $20 an hour.
Danielle Kirgan, Macy’s chief transformation and human resources officer, said Macy’s wants to be the “preferred” employer in all its markets.
“By investing in our colleagues’ education and financial well-being, we’re determined to ... enable them to pursue their own aspirations within and outside of Macy’s,” Kirgan said in an email.
There is no requirement to stay with Macy’s after completion of a program.
Ikea last month announced similar initiatives, boosting starting wages to $16 an hour as of Jan. 1, with some starting at $17 or $18 an hour depending on location. Ikea also boosted paid time off to five weeks and is offering education assistance and backup child and adult care. Most U.S. workers will get part of a performance-based payout totaling $76 million.
Target CEO Brian Cornell called recent investments in the workforce “the most productive ones we’ve made.”
He said boosting pay and benefits has allowed the mass discounter to hit its goals as it has been hiring 100,000 seasonal workers chainwide, many of whom will be offered permanent spots.
“Unlike what you’re hearing from many others, because of the investments we’ve made in pay and benefits and our focus on team member training and engagement, the hourly turnover rate in our stores is actually running lower this year compared with 2019, particularly for our newly hired team members,” Cornell said during a Nov. 17 conference call with analysts.
But many smaller retailers still are scrambling for workers.
Kathi Gromacki was able to hire two extra part-time people she found through Instagram to bolster a staff of seven at The Nest on Main in Bel Air. The owner then had to figure out how to spread those workers to cover the hours at her gift shop.
During the holiday season, “I usually expand my hours, but I didn’t want to run my staff thin,” she said.
This year, for the first time since she opened the shop, she has opted to remain closed one day a week, on Mondays.
Albert Holley, who owns three Rita’s Italian Ice and Frozen Custard franchises in the Baltimore area, is hosting hiring events for the first time this year for the upcoming season. He invited potential applicants to come to an event Saturday at his Catonsville store to experience what it’s like to work at Rita’s, hoping that will lead to less turnover during the season.
“We’re trying to staff three locations and trying to get ahead of the curve,” he said. “We’re trying to get people hired and trained to hit the ground running.”
The Catonsville location will be the earliest to open, in February, with a Windsor Mill store and Harbor Place kiosk opening in March.
Because the business relies mostly on high school students working a first job, he’s found a steady supply in the past and feels hopeful that will continue this year.
“If we were competing for more skilled or older workers, it might be a challenge, but we’re dealing with young people looking for work,” he said.
Hiring from the young demographic has been an adjustment for Quinn Stickline. She needed to change both her interviewing and training to be more appropriate for less-experienced applicants and hires.
“Our standards are pretty high and we offer white-glove service,” she said of her boutiques. “This is a challenging job for first-time employees.”
She said she tells prospective applicants: “If you’re comfortable moving and want to stay busy, you’ll do great. But if you get overwhelmed quickly, this might not be the right job.”
She felt relieved after hiring the 29 people she needed — only one opening remains — and brought in additional workers to staff a gift-wrapping room.
“We got out in front of it early and did the prep work and thought of all the pitfalls,” she said. “I’m holding my breath, but it seems to have come together.”