Retailers will face tougher challenges during holiday hiring this year

Due to high employee turnover and strong seasonal needs, retail recruiting has always been difficult. But now, changing consumer and candidate expectations are impacting retail recruiting making it more challenging than ever. The new challenges that retailers face will require HR and recruiting to become even more critical business partners to ensure future success for brick and mortar stores

Increased pressure from online competitors

Online shopping for the holidays is growing more popular each year. In 2018 online holiday sales grew by 20% while in-person retailers saw only a modest 5% growth. Furthermore, online retailers are crowding out traditional brands. L Brands, CVS, Bed Bath and Beyond, and Sears have all seen significantly lower performance while online retailers Amazon and Alibaba have surged to the top of the fortune 2000.

Competition from the online availability of products has changed the reasons why consumers visit retail locations. Consumers are expecting more than just products from a retail store, they’re expecting a good experience. Data from VendHQ suggests that one of the primary factors that influence consumers to visit retail stores is strong customer experience. To create these experiences, retailers need workers that can deliver positive face to face customer service and develop a high level of knowledge about products.

Besides soft skills, modern retail workers must also be able to work with technology. Technology informs nearly every aspect of the retail business from supply chain to point of sale systems. Even entry-level retail workers must have the aptitude to quickly develop or already possess the skills needed to operate POS systems, scanners, and tablets. According to data from Indeed, the increased technology skill requirements are posing another challenge for retailers with 70% of retail employers reporting difficulty finding candidates with relevant technical experience.


HR must be a key business partner to manage the transition

Carl Boutet, a Retail Strategist at Genetec, believes the future of retail is going to be “less and less about products and more about what people are going to do and experience in the store.” Businesses that will continue to grow and prosper in the future of retail will need to shift from a product focus to a customer experience focus.

HR and recruiting will be an important business partner for making that transition possible. Your employees are the ones who will be delivering customer experiences. Retailers generated 850 billion in revenues during the 2018 holiday season according to a Mastercard report. It’s important that retailers make the right hires for seasonal temporary workers because the holiday season is a massive opportunity for revenue.

Stiffer competition for candidates

2018 saw a surge of holiday hiring in the U.S. with more than 700,000 positions open. The Palmer Forecast predicts an even greater demand for seasonal workers this season. Unfortunately, the need for additional talent is clashing with the current unemployment rate, which remains low at 3.1% in the U.S. The talent pool is limited abroad as well with the U.K. experiencing a 44 year low in unemployment. Greg Portell, lead partner in retail with consultant A.T Kearney said: “As unemployment falls, retailers will struggle to find the number of qualified workers they need to fill temp roles.”

There's more bad news. While battling each other for needed talent, retailers must also fend off competition from employers outside the retail industry. Indeed data showed that 51% of retail job clicks originated from a "blank query." Many of the candidates who are looking for retail positions are actually looking for any job they can find. Furthermore, an increasing number of American workers are participating in the gig economy and foregoing traditional job application processes entirely. The Pew Research Center reports that nearly 1 in 4, Americans are earning money by participating in platforms for finding temporary work on the fly.

How are leading retailers managing these challenges?

Retailers are starting to look for seasonal talent earlier in the year. Large retailers kicked off holiday hiring efforts early this year. Kohl’s began their efforts for 500 stores in July and started recruiting for their remaining U.S. stores, and e-commerce fulfillment centers in August. But even that hasn’t been enough to fill positions. Stephen Frank, Managing Director at Manpower, reported “a shortage of drivers (in some locations in the US) so severe that retailers are asking all employees to pitch in by delivering inventory to stores.”

Retailers across the board are offering improved compensation packages and benefits to make temporary positions more attractive. Gap, Kohls, and Target all offer discounted prices, flexible schedules, and wellness offerings to their seasonal hires. Walmart has offered to pay for its employees to go to college to study business or supply-chain management. Starbucks is offering part-time workers a 100% contribution match for 401(K) contributions up to 4 to 6% of all its employees' salaries.

As a result, candidates applying for in-store positions as sales floor associates and nonstore positions in distribution centers, call centers, and online fulfillment all expect better compensation packages. However, there is only so much that retailers can do to compete on compensation and benefits.

Greater expectations from candidates for quality candidate experiences

Candidates are in the driver's seat and expect responsive, timely, and human hiring experiences from employers. Many candidates believe that the hiring experience employers create reflects how the company treats its employees. Candidates begin to make decisions about the attractiveness of an employer based on recruitment marketing materials and their career site experience. Even the copy used in job descriptions is considered. Retailers need to ensure that they create a consistent, responsive, and high-quality experience across their entire online presence.

Your competitiveness as an employer is going to hinge on your employer brand and the ability to create a positive candidate experience. In retail, many of your employees, and their networks are also your customers! Because of that, focusing on candidate experience and employer brand will not only help you make better hires but will also help improve your revenue. Virgin Media lost nearly 5 million in annual sales due to candidates having negative experiences and then proceeding to stop purchasing Virgin Media products. After they improved their candidate experience, the losses stopped entirely and Virgin Media was actually able to attribute increased revenues to their recruiting process enhancements!

Nearly 85% of applicants report never hearing back after applying to a job. This phenomenon is known as the candidate black hole. A black hole can really hurt your candidate experience and employer brand. Data from CareerBuilder also shows that a single bad application experience will cause nearly half of candidates to never seek employment at the offending company again. High turnover rates of retail talent and the pervasiveness of boomerang workers in retail talent pools make poor candidate experience extremely dangerous for the health of retail talent pools. Retailers can't afford to ignore candidate experience.

Make candidate experience your competitive advantage with recruiting automation

Using recruiting automation to engage candidates is a great way to improve your candidate experience. A type of AI called a chatbot is one type of automation retailers should consider. Recruiting chatbots can engage candidates over webchat, email, text message, and popular messaging apps. Many recruiting chatbots deploy directly in the application path, integrate with ATS/CRM systems, and offer multi-lingual support. Retailers will see the most benefit from applying recruiting chatbots to sourcing, screening, and interview scheduling.

Learn more about how AI and chatbots are transforming recruiting by reading our eBook "3 Ways AI is a game-changer for recruiters."