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Staffing Shortage is Retail's  Biggest Holiday

Staffing Shortage is Retail's Biggest Holiday Concern

Nov. 15, 2023
Yet, 87% of retailers are optimistic this year, according to UKG survey.

While staffing shortages is nothing new, the level of these shorages have reach high rates.

A new report on holiday season retail trends from UKG  finds  one in  three retailers (32%) say staffing shortages limit their ability to adequately care for customers at least weekly. this is due to store traffic and shopper demand  increasing year over year.

Alsomst all retailers (96%) — up from just 40% in 2022 — have plans to increase headcount in stores for the 2023 holiday shopping season.

Seasonal hiring goals could be difficult to hit, however, as turnover continues to be a challenge and competition for talent remains strong, potentially putting the customer experience on the line.

The fourth-annual UKG survey finds most retailers (87%) are more optimistic this year heading into the holiday shopping season, yet warn the lines might be long and their stores understaffed, mainly due to poor shopper behavior and a failure to prioritize what matters most to their people. According to the study:

  • Around 75% say shopper expectations are higher than what their stores can deliver.
  • At the same time, 1 in 3 retailers are dealing with angry or aggressive shoppers in stores at least weekly, and retailers say this and increased exposure to other adverse situations (e.g., increased theft/loss in stores) are dissuading people from working in retail. 
  • Moreover, 82% of retailers say store employees want more schedule flexibility than they currently provide, and 1 in 3 say managers are quitting in order to get it. 
  • Plus, 93% of retailers say their stores are struggling to meet sales goals, and nearly a third (31%) say staffing shortages are the cause.

Where Have All the Store Employees Gone?

U.S. stores are understaff one third of the time, on average, and many retailers (69%) say it's their #1 one concern this holiday shopping season. 

Nearly half ( 48%) expect stores to be understaffed two to three days per week.

Around half of retailers also cited year-over-year increases in voluntary (54%) and involuntary (49%) turnover, and research from Great Place to Work finds only 2 out of 3 retail employees (67%) plan to be in their same jobs within the next six months — well below other U.S. industries, which average 78%.

“Understaffing in retail has been a problem for years,” said Rob Klitsch, industry principal, retail and hospitality, at UKG, in a statement. “Hiring people is an uphill battle because of increased competition in and outside of retail, and retaining staff is challenging because only half of employers are prioritizing things like workplace culture (54%) and supportive managers (48%). More leaders need to understand that their most critical success factor is their people. Investing in the employee is always good for business.”

Be the Best to Attract the Best: Retailers Break It Down

Two out of five retailers say stores’ top staffing priorities when planning for seasonal spikes include delivering a seamless omnichannel experience (41%) as well as convenience for shoppers (40%). But more than that, closer to half of retailers (46%) say they’re focused on keeping staff engaged, happy, and satisfied.

“They have to be,” said Klitsch. “Satisfied employees are crucial to keeping retailers in business. You have to get the employee experience right year-round.”

So, what do retail employees and jobseekers care about most when it comes to their employment? Retailers have found wellness benefits top the list, followed by competitive pay, core benefits, growth opportunities, frequent and transparent communications from HQ and store leadership, and schedule flexibility. But these needs aren’t being prioritized across the board for employees or managers.

Nearly 9 in 10 retailers (87%) also admit they could be doing more to support store employees with mobile technology. Just 45%, on average, have equipped store staff with a mobile solution to complete common work tasks or access work-related information (e.g., submitting time-off requests, swapping a shift, or sending out employee communications and managing employee schedules). More than a quarter (28%) say inefficient tools and technology for store employees are to blame for sales deficits, and even managers are pointing out their stores’ technology constraints as reasons for quitting.

When peeling back the layers and prioritizing employee satisfaction, retailers are seeing the benefits of solutions powered by AI: Around 1 in 3 retailers are leveraging AI to streamline valuable people processes today and, among them, almost all (92%) believe AI improves efficiencies in the flow of work for store managers and employees.

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