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Signs of the Times: Help Wanted

By Ritchie Sayner

Advanced Retail Strategies

The sign in the store window reads: Help Wanted - Please Apply or Now Hiring - Join our Team or some variation of those words, all with the same urgent plea…we need help and we need it now! As of September, the labor force participation rate stood at 61.5%, down from 63.3% pre-COVID, according to the U.S Bureau of Labor Statistics. That reduction amounts to about 4 million people currently NOT in the labor pool. It isn’t difficult to understand why retailers (and other businesses) are having such a difficult time finding people willing to work when you break it down. Clearly there are plenty of jobs available, but few interested takers. And it’s not just retail. A growing number of folks today simply don’t want to work - period. According to Craig Johnson, founder of the retail advisory group Customer Growth Partners, “The growth in demand for retail services… has been far stronger than the growth in the supply of labor needed.” There has been a sales increase of nearly 14% in general merchandise, apparel and food purchased for consumption at home, not including gas, cars, and restaurants, from January to September of 2021 compared to the same time in 2020. When you couple this with roughly 4 million fewer people in the labor pool, logic would indicate that things are out of balance. Most people understand why retail sales are up sharply this year, even given the continuing supply-chain issues. What many retailers are scratching their collective heads over is why they can’t find, Continued on page 22

Continued from page 21 and keep, good help or any help. Some of the reasons include government aid, continued concerns about COVID and what has been termed “the underground economy.” Initially some folks found that they were better off financially by simply choosing not to work. Others were forced out when faced with the lack of childcare options. Regarding COVID-19 considerations, some voluntarily left the workforce because of mandatory vaccination requirements from some companies or even mask mandates. Another contributor is the ever-growing cash economy. If someone is working and being paid in cash, those figures do not show up on the government statistics. In many instances, those “cash” jobs pay more than retail can and the recipients are still eligible for stimulus checks since the government has no visibility to this segment of the workforce. The agriculture sector, and in particular the continued growth of marijuana, is a significant contributor. “The estimates are that the underground economy is 7-8% of the total economy,” said Andrew Challenger, the senior VP of Challenger, Gray & Christmas, an outplacement and career transition services company in Chicago. With the retail sector being the single largest employer in the country, it’s easy to see how the labor shortages affect the industry.

The Ripple Effect

Johnson estimates that retail accounts for nearly 25% of all jobs. “According to the U.S. Department of Labor Statistics, of the 154 million people working across all sectors in 2020, approximately 14.9 million were in-store retail workers,” Johnson said. “Another 5.6 million worked in wholesale and 5.5 million in transportation and warehousing.” What this means is longer lines at stores, fewer workers to help customers, longer delivery times and less products on the shelves. Recent data for October 2021 had retail sales up 1.7% even with the issues being discussed. The main driver appeared to be early Holiday shopping because of concerns over product availability.

Solving the Problem

It would seem logical that the easy remedy for labor shortages, assuming the issue truly is one of supply and demand, would be to increase the base pay. In some instances, this works but not in all. Hiring bonuses have also been used to entice workers as well as flexible hours.

By 2030, 9.5% of the civilian labor force is projected to be over the age of 65, according to a recent U.S. Department of Labor Statistics report. The report says that “not only is the share of older people in the labor force growing, but their labor force participation rates are rising.” The increase in older workers is driven by healthier, better educated baby-boomers with a longer life expectancy. They have chosen to continue working out of financial necessity or merely for something to do part-time. Retailers might be well-served to focus their recruitment efforts on this segment of the population. This group tends to be hard working and reliable. In other words, they show up for work when scheduled and rarely ask for time off. Most retailers tend to gravitate toward younger people to fill the scheduling voids on the selling floor. Since this isn’t always possible these days, other options need be considered. For the sporting goods industry, the hiring gap for certain sports, say hockey for example, might be mitigated by considering adult-league players, retirees or even hockey moms. I spoke with Traver McLeod, owner of Hockeywolf, a member of NSGA’s Hockey Dealers Association division with locations in Montana and Washington. McLeod is finding success using program directors and coaches, as well as hiring older employees, citing the fact they tend to be more stable and service oriented. He also mentioned he can accommodate older workers with four-hour shifts versus the typical eight hours, which has helped to fill his schedule.

Ritchie Sayner

Sayner has spent the past four decades helping independent retailers improve profitability. In addition to speaking to retail groups nationwide, Sayner is a regular contributor to retail industry publications. Prior to embarking on his retail consulting career, he was the general merchandise manager for an independent department store in the Midwest. Ritchie is a graduate of the University of Wisconsin-LaCrosse. He is also the author of the book, “Retail Revelations-Strategies for Improving Sales, Margins, and Turnover.” He can be reached though his website at www.advancedretailstrategies.com.