Retailers hope to staff ahead of holidays due to labor shortage

Karen Hilt owns My Secret Stash in Traverse City, Michigan, where she retails goods from local artists and vendors, and the business is booming. Hilt is so optimistic about the upcoming holiday season that she is gearing up to open a second location.

But like many small business owners, it faces a persistent labor shortage, and staffing a new store remains a challenge.

A recent poll by the National Federation of Independent Business found that nearly half of the owners surveyed face severe or moderate staffing problems.

“I have six in both places, and I would like to have 10 or 12 workers. It would make me so much happier, ”Hilt said.

To fill the gap, she added, “I work almost seven days a week, morning, afternoon and night.”

Hilt’s upbeat sales forecast for the holidays is shared by the National Retail Federation, which expects a tumultuous season with sales rising 8.5-10.5% in November and December to reach $ 843.4 billion to $ 859 billion. The forecast will surpass last year’s numbers and set a new record, despite a triple blow to companies across the country: labor shortages, supply chain problems and inflation.

“If retailers can store goods on their shelves and shippers can get the goods home by Christmas, it will be a really big year for holiday spending,” said Jack Kleinhenz, chief economist at NRF, noting that the staffing issue is not just about retailers in stores and on the Internet, but also in the supply chain.

Supply chain disruptions and labor shortages can exacerbate the situation. According to the NFIB, 48% of small businesses believe supply chain disruptions have a significant impact. Of those who rely on holiday sales as a significant portion of their annual income, 38% expect such a shortfall to affect sales.

“We are seeing a shortage of workers in distribution and storage facilities. This is partly due to the timing of delivery of products, even from the port, until the moment when these products reach the distribution area and warehouses. They juggle for hours, they manipulate people, and people work overtime, ”Kleinchenz said.

Retail jobs reached 1.3 million in August, according to the Bureau of Labor Statistics. Challenger, Gray & Christmas predicts 700,000 people will be hired this season. According to BLS, 35,000 jobs were created in the retail sector in October. Amazon, Target, Walmart and others are looking for hundreds of thousands of employees and are raising salaries by offering bonuses and more for hiring.

Baltimore-based Under Armor said it is entering the holiday season with more teammates than in years past in its retail stores. The company has hired 1,000 seasonal workers and is looking for 1,000 more workers to be employed over the next few months.

UA is providing a new in-store reward program for all retail employees, seasonal, full-time and part-time, which allows them to earn monthly bonuses that can equal 8% or more of their hand-held wages – in addition to $ 15. hourly start-up pay rose from $ 10 an hour this summer to talent success.

“We’re in one of the most competitive environments we’ve seen in a very long time, especially in retail stores. I think the decision we made earlier this year to increase starting wages from $ 10 to $ 15 certainly helped us get ahead of the holiday hiring we’re in now, ” said Stephanie Pugliese, President of UA North America.

“Vacation season is always the peak when any retailer can hire and make sure we have enough teammates to meet customer demand, this is truly a long-term investment that we are making to grow our business. made our plans to invest in this talent on the go. “

Back in Michigan, Hilt said she is not immune to supply chain disruptions arising in the industry, but as larger retailers face product shortages, she is positioning herself to be successful selling local goods like houseplants. Plant sales did skyrocket during the pandemic as home customers sought to tidy up their environments and their large gatherings.

“We are definitely outperforming our forecasts from years past and our customers are happy – we love that everyone is focusing on local shopping,” Hilt said. “I haven’t hung a lot of food anywhere on the ship.”

However, she pays much more than the minimum wage and offers workers additional benefits such as free meals. Most of all, she hopes that small changes will help improve the quality of customer service in the face of staff shortages.

“I feel like here are some lemons and let’s make a whole bunch of lemonade,” Hilt said. “When some people come and do warehouse operations before or after we close, because if we do it when we are open, it negatively affects the experience of our customers who are in front of us who take the time to go out and want to walk shopping. They want us to attend for them, so we’re just trying to look a little more creative. “

CNBC’s Betsy Spring contributed to the story.