HOLIDAY

Retailers forecast disappointing holiday season as labor shortage rages

American retailers are trying to maintain an optimistic outlook ahead of the pivotal holiday-shopping season but are alarmed about the broader effects of the current labor shortage and pandemic-induced supply chain disruptions. 

Three-quarters of U.S. retailers said shoppers expect more from stores than they can deliver due to the labor crunch, according to a new survey from UKG, a workforce management company. Another 85{3132c872e6c78dc13c400a594a399f7f701f7fca090fe22c84668d12b33a9deb} are anticipating that supply chain issues will further disrupt shoppers. 

Kris Kringle Christmas store and shopping arcade in Carmel, California, September 5, 2021. Photo courtesy Sftm. (Photo by Gado/Getty Images) (Photo by Gado/Getty Images / Getty Images)

“It’s becoming increasingly obvious that job hesitation — rather than job availability — is the reason we’re not seeing a meaningful increase in workforce activity,” Dave Gilbertson, KPG vice president, said in a statement. “The remarkable number of available jobs is made null and void so long as people remain unwilling to jump back into the market.” 

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The survey of 312 store managers, owners and executives found that a majority – 64{3132c872e6c78dc13c400a594a399f7f701f7fca090fe22c84668d12b33a9deb} – expect to see a year-over-year decline in employment this holiday season, while another one in four predicted staffing shortages and unplanned absences that could result in daily understaffing. It was conducted between Aug. 31 and Sept. 9. 

As a result, many stores said they were doubling down on hiring: 52{3132c872e6c78dc13c400a594a399f7f701f7fca090fe22c84668d12b33a9deb} are recruiting more heavily than in years’ past, including 80{3132c872e6c78dc13c400a594a399f7f701f7fca090fe22c84668d12b33a9deb} who said they began the search for season associates well ahead of the typical holiday-hiring surges. Nearly half said they started looking for employees before September. 

But the problem, respondents said, is that many people are simply uninterested in working retail, whether it’s because they want higher pay, are worried about contracting COVID-19 or view the work as particularly grueling. 

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Businesses are also worried about retaining good employees rather than attracting new talent. One in 10 said they expect workers to quit daily, while at least 84{3132c872e6c78dc13c400a594a399f7f701f7fca090fe22c84668d12b33a9deb} expect workers to quit on a monthly basis. 

“Retailers need to know it’s not just about compensation,” Gilbertson said. “It’s about flexibility and showing that you value your associates. It’s about training and developing your workforce and making sure people feel that they’re starting a career, versus just working day to day.”

The survey comes after a new Labor Department report released on Tuesday revealed there were an estimated 10.4 million open jobs at the end of August. Though a slight decline from the end of July, it’s still a staggeringly high figure; there are some 2.7 million more open jobs than unemployed Americans looking for work.

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The number was exacerbated by a record 4.3 million people who quit their jobs in August, representing about 2.9{3132c872e6c78dc13c400a594a399f7f701f7fca090fe22c84668d12b33a9deb} of the country’s workforce, according to the Job Openings and Labor Turnover Survey (JOLTS) report. The report was released just a few days after the government’s September jobs report, which revealed payroll increased by just 194,000 last month, well below the 500,000 expected by Refinitiv economists.