Hiring Retail Workers This Holiday Season: 2 Things You Should Know

We’re in the midst of seasonal hiring right now, and for the first time since 2019 retail demand is outpacing warehouse demand. Magnit’s Pay and Talent Intel data provides the insight on two key market trends and what organizations need to do to optimize their workforce landscape given these shifts:

(1)   The Impact of Wages

U.S. wage trends for retail associates and warehouse associates have trended up since 2018 at rates of 22% and 9%, respectively, in response to COVID and the increase of ecommerce distribution centers:

But while wages for both categories have increased, pay for warehouse workers has remained higher than retail each year – 15% to 25% more on a national level. In some states, the difference ranges as large as 45%.

As you might expect, this significant pay discrepancy has driven a substantial increase in warehouse workers as people gravitate toward greater earning potential. Depending on the state, there are currently 50% to 250% more warehouse workers than retail.

(2)   Shifting Demand in Late 2022

Now, for the first time in three years, retail demand is greater than warehouse demand. Likely contributors to this reversal include:

• The disbursement of online holiday shopping days
• A decline in general purchasing due to economic concern
• Slowing turnover in warehouse and distribution centers amidst retention bonuses and higher pay
• Ongoing hiring needs in retail because of a lack of hiring and retention success.

Succeeding in this New Landscape

With this shift in demand, savvy organizations will need to adjust their approach to ensure they have right workforce mix to drive success in late 2022 and into 2023. Strategies to consider beyond increased pay include:

• Using data to identify opportunities to redeploy warehouse workers to retail
• Allowing for greater shift flexibility with more shift options (both shorter and longer)
• Leveraging technology to enable workers to swap or change shifts last minute
• Utilizing creative payrolling options for same week, or even same day pay
• Permitting overtime for those who wish to increase earnings
• Offering 60- or 90-day retention bonuses
• Increasing employee discounts, and other non-wage incentives or perks
• Having transparent criteria for opportunities to remain on staff after the seasonal hiring period

For more on recent market trends, download our latest Labor Market Report.

If you’re interested in learning more about how Magnit is helping organizations implement winning contingent workforce programs globally, please contact a Magnit representative at info@magnitglobal.com.

Disclaimer: The content in this blog post is for informational purposes only and cannot be construed as specific legal advice or as a substitute for legal advice. The blog post reflects the opinion of Magnit and is not to be construed as legal solutions and positions. Contact an attorney for specific advice and guidance for specific issues or questions.