- Many retail storefronts have had “Now Hiring” signs plastered on their entrances for months.
- With the holiday season approaching, leaders are feeling the pressure to attract new workers.
- While incentivizing employees with pay is undoubtedly one of the best methods of attracting and retaining workers during the ongoing labor shortage, in some cases, it might not be enough.
The ongoing labor shortage has made waves across the global workforce as employees take power into their own hands when it comes to their workplace preferences.
Now being referred to as the Great Resignation, workers are leaving their careers en masse as a result of existential realization brought on by the pandemic.
Workers no longer want to be an overlooked cog in the machine — they want to provide value to their work and be recognized for their contributions to the company.
And perhaps no other industry is feeling the impact of this movement as much as the retail industry.
Working in retail is notoriously difficult depending on the company. Oftentimes, these workers are underpaid, overworked, and face abusive behavior from both customers and managers.
So it’s unsurprising why so many retail storefronts have had “Now Hiring” signs plastered on their entrances for months.
With the holiday season approaching, leaders are feeling the pressure to attract new workers.
Since many regions across the world have dialed back on pandemic-related restrictions, retail companies are prepared for one of the busiest seasons in the past few years.
However, many workers are asking “Is it worth it?”
Employees that were laid off or furloughed have been profoundly impacted by the pandemic.
For over a year, many were forced to stay home and contemplate what their next move would be once COVID policies were pulled back.
The conclusion many came to was that they were unfulfilled, unsatisfied, and tired of the retail world.
And it’s no wonder why.
The average annual pay for a retail worker in 2018 was $34,500 in Washington state, which is just a few steps above poverty level.
More shocking is that figure is the highest average across the entire United States.
So for companies struggling to attract retail workers this holiday season, the answer is clear: pay up.
The Importance of Incentivizing
While paying more may seem too simple to be true, the reality is that many retail workers that have received unemployment benefits over the past two years were receiving more pay than their jobs ever offered.
This indicates a foundational problem.
Politicians and business leaders alike have blamed pandemic-era bonuses for unemployment benefits to be the sole reason for the labor shortage.
However, the issue lies far deeper than lack of pay.
Many of these companies have long stewed in a culture of high turnover rates and gotten away with it.
Did no one ever stop to ask why this has been normalized in the retail industry?
According to 2018 data from LinkedIn, the retail and consumer products industry ranked second among industries with the highest turnover rate.
However, it was a global health crisis that peeled back the layers of a truly unsupportive environment where many workers were either forced to give up their pay, or forced to deal with the toxicity.
Due to money being a basic human need, many chose the latter.
Rather than blaming the employees for the slowed labor availability, companies should do a full review of their own policies and pay and identify where the problem truly lies.
Leaders who remain stagnant in updating their company’s policies and benefits will likely fall victim to the Great Resignation.
Plus, research supports that incentivizing employees with pay helps stave off turnover rates.
In fact, a joint study from Harvard Business School and Yale School of management showed that quarterly bonuses do in fact boost productivity.
Companies Are Taking Note
Companies are coming to terms that a 20% discount on products and a mug are not nearly enough to attract and retain workers.
For instance, American Airlines recently revealed that flight attendants working between November 23 and November 29, as well as December 22 through January 2, will receive 150% pay.
The company, much like others in the airline industry, wants to incentivize employees to pick up shifts in preparation for what is expected to be one of the busiest travel seasons of the year.
Last year, in the midst of the pandemic, over 33% of companies said they would be offering employees a year-end bonus according to a survey by business and executive coaching firm Challenger, Gray & Christmas, Inc.
Even more, department store giant Macy’s is offering referral bonuses up to $500 for every friend or family member that employees recruit to join the company.
Walmart has also bumped their starting hourly pay to $17 per hour and is even offering to pay for some employees’ college tuition.
Amazon recently revealed that some warehouse jobs come with a signing bonus of up to $3,000.
While it’s clear that the pandemic warmed the hearts of normally stoic businesses, a global health crisis should not be the sole reason for employers to incentivize their workers with pay.
Not only does increased productivity have a direct correlation to incentivized plans, but this method also has been found to contribute to company-wide goals and team collaboration.
So for business leaders who are clambering for front line workers this holiday season, the answer may be far less complicated.
Paying employees works for retention rates, while also assisting in improving a company’s reputation in the eyes of future prospects and customers.
Is Pay Enough?
While incentivizing employees with pay is undoubtedly one of the best methods of attracting and retaining workers during the ongoing labor shortage (and all year round), it is not always enough; American Airlines pilot union rejected the company’s holiday pay proposal.
The good news is that there are other strategies businesses can implement to execute a desirable work culture.
A tight labor market reflects more than just a need for increased pay — it also indicates that companies are not doing enough to nurture a healthy experience for employees.
UPS may dominate the workforce in understanding the strain of a labor shortage, particularly during the holiday season.
In order to attract new employees, UPS uses college tailgate parties to get the word out about job opportunities, while also partnering with local transit authorities to ensure employees can have access to discounted transportation so they can get to and from work.
However, one of the most unique approaches to this holiday season has come from retail giant Target.
Instead of hiring a whole slew of new holiday workers, the company revealed it would cut back on new hires and give existing employees more hours.
Along with providing current employees more chances to pick up hours, Target recently launched an app that makes it simple for workers to pick up shifts, choose their preferred work times, or swap shifts in order to help them obtain a better work-life balance.
Target’s new strategy points to a recurring theme that has emerged from the pandemic — workers want flexibility.
By allowing employees to choose their schedules and adjust them to accommodate other responsibilities, the company is relaying the message of: “We trust you.”
A recent study of workers revealed that 74% of respondents said managers who instilled trust into their workers had a more positive work experience. That trust included receiving employee feedback and encouraging employees to share their insights about the best workplace practices.
Knowing this, it is clear that transparency, candidness, and trust from employers can make or break a company’s success rate.
Employee Experience and Retention Are Synonymous
The holiday season is hectic and laden with unfair treatment of workers.
As we enter an era that no longer ignores the injustices towards retail employees during this time, companies must strategize how to ensure they offer a place that people want to work.
At the core of this is employee experience.
If employees are satisfied and incentivized to do good work, the chances of them attracting new workers and staying on at their position are high.
However, these incentives need to expand beyond material possessions. In the post-pandemic era, workers want nothing more than a healthy work-life balance and financial security.
Therefore, business leaders need to shed the perception of what incentivizing means.
Paying workers fair wages, leading with trust and empathy, and allowing workers to have a voice cannot be beat when it comes to retaining and attracting workers.
Even beyond the holiday season, these strategies can aid companies combat the labor shortage in the future.