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Despite record pay and perks, few people want to work in retail this holiday season

High consumer demand and low staffing during the holiday season could make lines long and tempers short, analysts warn.
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Amid a crushing labor shortage, retail companies are dangling perks such as triple-digit sign-on bonuses, free college tuition and record-high wages in the scramble to staff up before the busy holiday shopping season. But it's still not enough to move the needle, raising questions about the ways in which understaffed stores could impact shopping this year.

“We’re predicting retail sales will be up this year over last year — and retailers have to get ready for that,” said Melissa Hassett, vice president of recruitment at ManpowerGroup Talent Solutions staffing agency. “Hiring intention in the upcoming quarter is higher than ever.”

Between November and January, holiday retail sales are estimated to hit $1.3 trillion, an increase of around 8 percent since last year, according to Deloitte’s holiday retail forecast. E-commerce sales are expected to increase by between 11 and 15 percent, to between $210 billion and $218 billion, the professional services company said.

That spike has led many employers to prep heavily for a hiring spree. Walmart announced plans to hire 20,000 workers who are eligible to receive debt-free bachelor’s degrees through the company’s Live Better U program. It also raised its starting wage from $11 to $12 for store workers. Amazon said last week it will hire 125,000 employees at an average starting wage of more than $18 per hour with a $3,000 sign-on bonus at certain fulfillment centers. Full-time employees will also receive health insurance, a 401(k) with a 50 percent company match and up to 20 weeks' paid parental leave. Best Buy is holding a virtual job fair this week to fill more than 5,000 positions across its stores, with a starting wage of $15 an hour, plus product discounts and savings on insurance plans.

“The market is a tight market, that’s really well known,” said Carletta Ooton, Amazon's vice president of Product Assurance, Risk and Security. “And what do we do? We try to look at what's the right employee package and the right market conditions in which we need to hire.”

Even after the federal pandemic unemployment benefits expired last week, jobs are still going unfilled. The economy added just 235,000 jobs in August and lost 29,000 retail jobs, according to the latest monthly data from the Bureau of Labor Statistics. There was also a 44 percent decline in retail applications per opening in August since the start of the year, compared to a 19 percent decline across other industries, according to data from talent cloud company iCIMS. It now takes 40 days to fill a retail position, a 21 percent increase from April this year, it reported.

The cost of acquiring talent has gone up three times since the pandemic, and it now takes 40 days to fill a retail position.

The lag in filling retail positions has retailers starting holiday hiring early this year, said Neil Saunders, a retail analyst with GlobalData.

“Consumer demand is very elevated, so retailers need more staff than ever to cope with things like fulfillment and serving customers in store,” he said. “However, at the same time, people are more reluctant to work in retail because of concerns about the virus and the stressfulness of the work, so it is harder than ever to find enough workers.”

That gap between consumer demand and understaffed stores during the holiday seasons can make it more difficult for retailers to keep shelves stocked and check out shoppers quickly in stores, Saunders said. For online shopping, it can mean consumers might run into shipping issues if companies can’t find enough workers to manage online orders.

Retailers are leaning on artificial intelligence to streamline the application process while also leveraging traditional marketing strategies like online and social media ads and text marketing, said Sara Gordon, vice president of customer success with the temporary staffing company Adecco.

“The cost of acquiring talent has gone up three times since pre-pandemic,” she said. “So you’re having to invest more in the attraction piece … It's all about meeting candidates where they're at.”

While bonuses may help, flexibility is a driving factor for potential retail workers, many of whom were women pushed out of the industry by the pandemic, Gordon said.

“I think, overall, people are really shifting their priorities,” she said. “Flexibility and the ability to acknowledge that life happens and life is happening in a very unpredictable world really packages employee mental and physical health as a priority and value proposition.”

For Andrew Tovinger, who lost his job in March last year, Target’s $3,000 hiring bonus to work at one of its Pennsylvania distribution centers was enough to lure him to the position. Tovinger, who said he has made a living selling clearance and discount items on eBay, plans to work the holiday season to save for a move to Wyoming with his girlfriend.

“I live in Amish country, so there is not much out here,” he said. “The way I look at it is that $3,000 bonus could be my U-Haul trip out there.”

But holiday bonuses are not enough to draw some workers to the job, especially those who are already balancing other work. Ellen Banks, a 28-year old social services worker in the Bronx borough of New York City, told NBC News she already has a full-time and part-time job but is looking for a flexible seasonal job to add to her load to help her save for an apartment.

“Bonuses are not factoring into my decision about where to work for the holidays,” she said. “I don’t have a preference, just anywhere that will work with my schedule.”