Why it matters:
- In order for businesses to attract talent in a tight labor market, raising wages for entry-level jobs is just part of the equation: Workers today seek scheduling flexibility and training for career opportunities, too.
- Many large retailers are touting added benefits such as free tuition and the ability to advance quickly.
- Young consumers in particular appreciate the ability to apply for jobs via text or online, such as the virtual employment screenings offered by CVS Health.
In today’s extraordinarily tight labor market, retailers are reworking their recruiting strategies in a bid to position themselves more favorably to potential employees.
Although retail hiring trended up slightly in September, with 56,000 retail jobs added according to the Bureau of Labor Statistics, many retailers report ongoing hiring challenges despite raising starting wages for entry-level employees.
While offering competitive wages remains important, workers have also had a chance to reconsider their priorities during the pandemic and are seeking jobs that offer scheduling flexibility so they can better enjoy their personal lives, training that will help them advance in their career paths, as well as other benefits, said Tom Hill, a partner at Axiom Consulting Partners.
In addition, most retailers are limited in terms of the hourly wages they can afford to pay their workers, making these other incentives especially important in the current environment, he said.
“Big retailers, quick-service restaurants and distribution centers—mostly [from] Amazon—have set the market for pay for all retail,” Hill said. “What we advise clients is that you can only pay so much in order to hit some of those pay levels that some of those organizations are setting right now. What other retailers need to do is think about how they can compete for talent using other components of an employee value proposition.”
Flexible scheduling is one of the key areas that retailers can address to attract workers, said Hill, who noted that high employee turnover often correlates with workers seeking preferred scheduling.
Wooing workers with flexible schedules to career advancement opportunities
Flexible scheduling is one of the key areas that retailers can address to attract workers, said Hill, who noted that high employee turnover often correlates with workers seeking preferred scheduling.
“That’s particularly true when they can just walk down the street and get another job with similar pay that offers the schedule that they want,” he said.
In addition, offering enough hours to allow workers to qualify for benefits such as paid health insurance is also important to many workers. Historically, some employers have sought to limit workers’ hours to prevent them from qualifying for benefits, but that may be a mistake, Hill said.
Providing career development and advancement opportunities within the organization is also important, he said, although he conceded that this can be difficult for smaller retailers.
“I don’t think it necessarily requires a big, formal training program,” said Hill. “It can be more on-the-job experiences that help those employees build their skills.”
The tight labor supply comes just as many retailers are staffing up for the year-end holiday season, with some retailers announcing plans to hire thousands, or even tens of thousands of seasonal employees.
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Perks from the nation’s biggest retailer: A college degree for ‘$1 a day’ to discounted fitness plans
Walmart, which in September said it plans to hire 150,000 new workers for the holidays and beyond, exemplifies the strategies that retailers are taking to attract and retain workers. Included among the perks the company is touting to potential employees:
- Regular schedules that are set two weeks in advance;
- Advancement opportunities, with promotions and raises for entry-level employees after seven months, on average, as well as on-the-job and classroom training;
- The company’s Live Better U program, which allows workers to earn certain college degrees for $1 per day, while Walmart covers the cost of tuition, books and fees; and
- Matching stock ownership plans for employees seeking to invest in the company.
Workers also get a 10% discount on fresh food and general merchandise, as well as discounts on cell phone plans, fitness club memberships and more, Julie Murphy, chief people officer at Walmart U.S., said in a recent blog post.
Similarly, department store giant Macy’s is also promoting itself as a viable option for entry-level workers seeking to launch a career. The company recently said it plans to hire 76,000 full- and part-time workers at its Macy’s, Bloomingdale’s and Bluemercury stores, call centers and distribution and fulfillment centers. About 48,000 of those positions will be seasonal, while the rest represent permanent career opportunities, the company said. Last year, more than 6,100 seasonal hires remained with the company after the holidays, the retailer said.
“We are proud to provide colleagues with ample opportunities and resources to grow in a dynamic, collaborative and inclusive environment during the holidays and every day of the year,” said Danielle Kirgan, chief transformation and human resources officer at Macy’s, in a statement.
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Tapping talent via referral bonuses and text-based hiring
Among the benefits she touted were competitive pay, flexible scheduling, optional overtime and additional incentives, including discounts on merchandise. Macy’s also offers $500 referral bonuses for current employees who suggest a friend or family member for a position.
Another key strategy for attracting workers in today’s environment—especially young, digitally savvy workers—is to offer text-based, as well as online, applications and hiring processes, said Hill of Acxiom.
Drugstore retailer CVS Health, for example, which said in September it was seeking to hire 25,000 workers, is encouraging qualified candidates to apply for open positions via text or online through a streamlined digital screening process.
“By leveraging CVS Health’s innovation and technology, we're making it easier for qualified and caring candidates to join our team and contribute to the company’s ongoing efforts to help solve the country's health care challenges,” said Jeffrey Lackey, vice president of talent acquisition, CVS Health.
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