New York, Oct. 13 (US): All employers want Christmas is some help in the holiday. But they may not get their wish.
Companies that typically employ thousands of seasonal workers are taking holidays during one of the most tight labor markets in decades, making it unlikely they will find all the workers they need. For shoppers, it could mean a shopping experience less than a pleasant vacation, with unstaffed store aisles and online orders taking longer than usual to fill.
Job opportunities are already plentiful, allowing job seekers to be more selective about where they work. There were 10.4 million vacancies at the end of August and 11.1 million jobs in the previous month, the highest level recorded since at least December 2000, when the government began recording that number. Meanwhile, the Labor Department said the number of people leaving their jobs jumped to 4.3 million in August, compared to 4 million in July, the Associated Press (AP) reported.
Even before the holiday hiring season, employers were so desperate to find workers that they raised their wages above $15 an hour, began offering four-digit login bonuses and promised to pay their tuition. But this has only led to limited success. If they can’t find the workers they need in time for the holidays, employers will likely rely on existing employees to work overtime, which can become costly for companies and tire workers.
“I’ve never seen a market like this before,” said Matt Lavery, UPS global director of sourcing and recruitment, who has worked on the staffing side of the package delivery company for 24 years. Usually when you talk about people getting rid of unemployment benefits, you see a rise in the number of candidates. We don’t see those.”
Enhanced unemployment benefits, which included an additional $300 a week in addition to programs that covered temporary job workers and people who have been unemployed for six months or more, expired in early September. This cut off aid to about 7 million people. So far, it appears that the termination of these programs has had little effect on the number of people looking for work.
To snap up available workers as quickly as possible, UPS is trying a new tactic: hiring in 30 minutes or less. Taking too long to hire can mean that the applicant may go elsewhere. So the company almost ran out of interviews, and did the entire hiring process online.
Not having enough workers can be costly for businesses. FedEx said it spent $450 million between June and August due to higher wages, overtime pay and other costs related to a tight labor market.
At one of its hubs in Portland, Oregon, FedEx has about 65% of the staff it needs. The company has diverted about a quarter of the packages that normally flow to other remote hubs that it can handle. More than 600,000 packages are being forwarded daily, deteriorating service, Rajesh Subramaniam, FedEx chief operating officer, said during a call with investors last month.
FedEx said it needs 90,000 holiday workers this year, 20,000 more than last year. Others are hiring around the same levels as last year: Amazon, UPS and Walmart, each of which is currently trying to hire 100,000 or more people.
There are many reasons for the labor shortage, but it mostly revolves around the pandemic. The delta variant has made people afraid to work in confined spaces with others, and most major employers who hire hourly workers have not yet imposed vaccinations on them. Childcare issues leave people needing to stay at home, and many have saved money during the pandemic, giving them enough cash to avoid taking jobs they don’t want.
Another potential wrinkle: President Joe Biden’s announcement in September that employers with more than 100 workers would have to mandate vaccinations or provide weekly testing. It is unclear when these rules will start or how this will affect hiring. Companies that have issued mandatory vaccinations have already reported high rates of vaccinations. A fully vaccinated workforce can make an employer more attractive to workers who fear contracting the virus. But some employers worry that delegation may complicate hiring further.
Some wonder if employers who need vacation assistance will be able to find workers in time.
“It doesn’t look good,” said Andrew Challenger, senior vice president at recruitment firm Challenger, Gray & Christmas, which expects retailers to add 700,000 workers over the holidays this year, 36,000 fewer than last year.
Already on the job site, searches by people looking for seasonal work fell 13% in the week ending October 10, compared to the same period last year. Those searches are down 27% from 2019, before the pandemic began.
“Caring for job seekers is slow,” said Anne Elizabeth Kunkel, an economist at Indeed. “It just doesn’t take off.”
Those who already work in stores, warehouses and parcel delivery companies may work longer hours.
Target said it will hire 100,000 holiday workers this year, about 30,000 fewer than last year, but it will give an additional 5 million hours to its current workforce, which could inject an additional $75 million into workers’ salaries. Target employees are already working 15% more than last year, but the retailer said they are asking for more hours. Target, which already pays workers at least $15 an hour, plans to give store workers an extra $2 an hour if they work weekends and other busy days near Christmas.
If employers can’t find the workers they need, online applications may take longer because there won’t be enough people to fill out applications or Delivering it, especially as Christmas approaches and more and more shoppers are online. And stores are likely to get rid of late-night or night-time hours because retailers will want their existing employees to work when stores are most crowded.
“You won’t see the wilderness for long hours because they can’t work in it,” Rowley said.
RAE