Tuesday, January 19, 2021, LOWELL, Mass., and WESTON, Fla.
Retailers Recap Highs and Lows of COVID-era Holiday Shopping Season
Despite Obstacles and Dire Predictions, the Annual UKG Post-holiday Report finds 60% of Retail Stores Avoided a Decline in Sales Volume
The versatility and resilience of retailers helped many stores survive 2020’s complicated holiday shopping season, which was plagued by frequent understaffing, high turnover, workplace anxiety, and a host of recruitment challenges, according to the annual end-of-season survey commissioned by UKG (Ultimate Kronos Group). While COVID-19 was undeniably disruptive to business, 3 in 5 retailers either reported an increase in year-over-year holiday sales in stores (37%) or no significant change (22%).
“Retail’s 2020 Post-holiday Season Review,” the second annual study from UKG surveying 300 U.S. retail managers1 responsible for hiring and/or staffing decisions in stores, reveals challenges and trends defining the 2020 holiday shopping season and insights that will help retailers streamline workforce operations in the year ahead.
Were retailers prepared for the 2020 holiday shopping season? Not exactly.
Despite best efforts to recruit, rehire, and attract seasonal staff for this most unprecedented season, only 2 out of 5 retail store managers (43%) said they fully met their hiring goals, and a mere 1 in 3 deemed stores fully prepared (35%) or felt they had adequate headcount to consistently meet shopper demand (33%) throughout the holiday season, even while COVID-era protocols dictated less foot traffic than years past.
A side-by-side comparison with UKG’s 2019 holiday hiring survey2 reveals little variation in terms of store preparedness year over year, according to managers—but it does show a noticeable rise in HR technology adoption to aid recruitment: More than twice as many retailers invested in talent acquisition (52%) and onboarding technology (50%) in stores ahead of the 2020 holiday shopping season compared to 23% and 21% of retailers, respectively, in 2019. It’s unclear whether technology adoption spiked in response to the pandemic, or if these investments were part of a larger HR transformation initiative among retailers.
Retailers underestimated how stressful COVID-19 would be for their frontline workers.
Only 1 in 4 retailers (27%) got through the 2020 holiday shopping season without seeing a member of their store staff test positive for COVID-19. Correspondingly, employee turnover attributed specifically to personal concerns about COVID-19 was high: Nearly half of retail managers (48%) said store employees quit at least once a month, and 14% said they lost employees on a weekly basis (2-3 times a week).
“Emotional connection and support have become increasingly important parts of leadership and company culture,” said John Machado, chief technology officer, UKG. “Hearing and addressing your employees’ concerns is critical to their engagement and retention—and understanding how your people are feeling is the first step towards improving their experience at work.”
Over the duration of the holiday shopping season, almost all retail managers (92%) observed COVID-related anxiety among store staff, including 81% who said employees felt stressed or anxious at least once a month. This magnitude of pandemic-induced anxiety in stores may have caught retailers off guard, as only 72% anticipated this kind of emotional response from workers when surveyed before the season.
“Anxieties resulting from the difficult circumstances that many retail workers faced throughout the 2020 holiday shopping season could have been alleviated by managers, if only those leaders were equipped with tools to collect and analyze employee sentiment in real time,” said Machado. “With the right tools, managers can see instantly what really matters to their teams, and can take action that actually makes a difference.”
Seasonal recruitment strategies differ between large3 vs. small and medium sized4 retailers.
A comparative analysis reveals two distinct approaches to attracting high-performing seasonal talent:
- Large retailers were more likely to offer employees flexible schedules (67% vs. 60%), enable shift swaps (49% vs. 40%), and allow associates to set their own schedule preferences (30% vs. 27%), and fewer—just 1 in 5 (21%)—said meeting candidates’ expectations around workplace technology posed a barrier during recruitment compared to 27% of small/medium retailers.
- Meanwhile, smaller organizations were more prone to offering unique perks that drive toward enhancing total employee wellness—like performance-based bonuses (32% vs. 20%), financial wellness benefits (20% vs. 13%), and mentorship opportunities (17% vs. 10%)—and were twice as likely to offer free COVID-19 testing (40% vs. 19%), a ‘stay’ bonus (34% vs. 13%), or free meals (24% vs. 10%) compared to large retailers.
“Holistically, we observed that large retailers promoted a technology-enabled culture with a focus on work-life balance, and that small and medium sized retailers—many of whom also offered a superior technology experience—demonstrated a strong culture of caring via the employee benefits they chose to extend to seasonal workers,” said Amanda Nichols, senior manager, retail, hospitality, and food service practice, UKG. “While neither approach is definitively better, any effort by employers to prioritize people over profits holds clout with prospective employees.”
Absence, understaffing, and attrition proved persistent and costly.
Although it was a profitable season for many, 2 in 5 retailers (41%) reported a noticeable decrease in year-over-year holiday sales volume in stores—and staffing issues are partly to blame:
- In a typical week, stores were understaffed 30% of the time, and 29% of retailers (up from 22% in 2019) said unplanned absence meant stores paid out more overtime than expected.
- A third of retail managers (32%) said employees would call out of shifts with less than 24-hour’s notice at least 2-3 times a week, while a quarter (24%) said employees “ghosted shifts” —i.e. did not show up for a shift and did not notify their manager—at the same frequency.
- Lateness was also an issue: 35% said employees did not show up on time for scheduled shifts at least 2-3 times a week.
- More than half of retail managers (55%) noted that attendance issues were more prominent among seasonal workers than permanent employees, while 2 in 5 (43%) said it was difficult to retain the seasonal staff they hired.
- Around a quarter of stores (27%) experienced higher mid-season turnover this year than last.
Despite massive disruption, retailers emerge stronger.
Overall, despite rising unemployment numbers, seasonal workforces were smaller (according to 2 in 5 retailers); furloughs were a daunting possibility (1 in 5 stores had to let seasonal workers go before the end of the season); and interacting with hordes of customers in stores, in person, in the middle of a pandemic was cause for concern (nearly 1 in 3 said store staff morale was generally lower than in prior years). As for store managers, whose responsibilities ballooned amidst the crisis, achieving holiday success—just as much about safety as driving revenue—was a considerably more complex task.
“With everything stacked against retailers,” said Nichols, “the burden lies on managers to execute on an all-new set of in-store safety requirements in addition to running day-to-day store operations. Throughout this challenging season, we have seen workforce technology emerge as a lifeline for many.”
Agile planning backed by technology gave some retailers an edge, including digital channels enabling curbside pickup and other buy online, pickup in-store (BOPIS) options—which 40% of retail managers said were favored by customers over in-store shopping on Black Friday—task management solutions simplifying oversight of critical cleaning and safety measures for 3 out of 4 managers (73%), and internal platforms giving 3 in 4 managers (73%) a tool to broadcast companywide or targeted communications in real-time and on short notice.
- Note to editors: Please refer to this UKG study as “Retail’s 2020 Post-holiday Season Review.”
- Join UKG and the workforce gurus at SYRG on Wednesday, Jan. 27, for a webinar recapping the craziest holiday shopping season on record. Register for the free RetailWire webinar here.
- Seeking additional retail insights or historical retail survey data from UKG? Follow the latest trends on the Industry Insights blog; download the 2020 pre-holiday season survey by UKG; and review findings from the 2019 retail holiday hiring pulse survey.
- Subscribe to The Workforce Institute at UKG and follow the think tank on Twitter for insight, research, blogs, and podcasts on how organizations can manage today’s modern frontline workforce to drive engagement and performance.
- The UKG U.S. Workforce Activity Report explores week-by-week workforce data with near real-time indicators—including shifts worked, employee new hires, and terminations—to help economists and policy makers gauge the health of the economy.
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At UKG™ (Ultimate Kronos Group), our purpose is people™. Built from a merger that created one of the largest cloud companies in the world, UKG believes organizations succeed when they focus on their people. As a leading global provider of HCM, payroll, HR service delivery, and workforce management solutions, UKG delivers award-winning Pro, Dimensions, and Ready solutions to help tens of thousands of organizations across geographies and in every industry drive better business outcomes, improve HR effectiveness, streamline the payroll process, and help make work a better, more connected experience for everyone. UKG has more than 12,000 employees around the globe and is known for an inclusive workplace culture. The company has earned numerous awards for culture, products, and services, including consecutive years on Fortune’s 100 Best Companies to Work For list. To learn more, visit ukg.com.
Footnote 1: 2020 Survey Methodology: This survey was commissioned by UKG and conducted online by Qualtrics from December 9-25, 2020, among a pool of 300 U.S. retail managers—including store managers, assistant/associate store managers, district/regional managers, and owners—who are responsible for in-store hiring and/or staffing decisions across numerous retail segments: apparel and accessories, big-box, consumer electronics, department stores, discount, drugstores, hardware/home improvement, housewares, luxury, and sporting goods/recreation. Nearly half of respondents work at a retail business that operates 100+ physical stores (49%) and employs more than 5,000 employees (49%). For questions about the survey methodology, please contact [email protected].
Footnote 2: The first annual post-holiday study from UKG (“2019 Retail Holiday Hiring Pulse Survey”) was conducted online from Dec. 19, 2019 to Jan. 6, 2020 among 300 U.S. retail managers.
Footnote 3: Large retailers, which represent 49% of the total audience surveyed, are defined as having 100+ store locations.
Footnote 4: Small and medium sized retailers, which represent 51% of the total audience surveyed, are defined as having fewer than 100 store locations.
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