The US Retail Sector Faces the Shortage of Workers

US retailers struggle to scrape up workers to fill more than 1.1 million vacancies in preparations for the upcoming holiday season.

Stores and warehouses are currently experiencing the biggest labor force shortages, where employers have to entice not only customers, but employees, too. Amazon is the prime example, as the corporation is looking to hire 125,000 workers to deal with the anticipated seasonal demand.

“There are not enough workers in the supply chain, so this will impact everything from availability in stores to being unable to fulfill all online orders in a timely fashion. On the shop floor, lines may be longer, and there will likely be fewer staff to assist customers. This is going to be a challenging holiday season for retailers,” said Neil Saunders, managing director at the research firm GlobalData Retail.

The tight labor market has already started to impact retailers, who started boosting wages and offering incentives in response. Walmart, for example, raised the minimum hourly rate at its Sam’s Club from $11 to $15 in September. Amazon now offers signing bonuses of $3,000, whereas Dollar General gives out $5,000 to new drivers.

The companies are tweaking their recruitment processes, too, to encourage applicants to sign up with them. Walmart’s new shortened hiring process takes only 24 hours, instead of the previous two weeks. Best Buy went a step further, offering new hires discounts on college fees, savings on insurance plans, and cheap gym memberships.

Unless they decide to offer improved working conditions and higher paychecks, the biggest losers in the race for scooping up additional employees will likely be smaller retailers and independent store owners. While the number of job seekers looking for employment via job posting services grows, the percentage of retailers claiming to have severe difficulties with hiring a workforce hasn’t been decreasing, either - in fact, it has jumped to a steep 62% over the past three months.