Despite rising pressures of a surging labor crisis and continued global supply chain disruptions, U.S. retailers remain optimistic for the 2021 holiday shopping season amid year two of the COVID-19 pandemic. According to research1 announced today by UKG (Ultimate Kronos Group), while retailers expect 2021 could be the worst holiday hiring season in memory (63%), nine in 10 are confident they can deliver a positive experience for shoppers (94%) and associates (93%).
Retailers: People Don’t Want to Work in Retail Due to Pay, Health Concerns, Unrealistic Shopper Expectations
Although the retail sector continues to see the strongest recovery across all U.S. industries in terms of hourly shifts gained month over month, 75% of retailers find shopper expectations are still higher than what stores can deliver. And while the National Retail Federation projects in-store retail sales could top $3.35 trillion this year2 — up from $3.10 billion in 20203 — worker shortages and turnover have left 68% of retailers struggling to meet sales goals.
One in four retailers (26%) expect holiday season staff shortages and unplanned absences to result in daily understaffing, while many cite demands for higher pay and health and safety concerns as the top reasons stores are struggling to attract workers. Retailers also blame a stressful work environment — with 88% worried about employee burnout — and argue that what jobseekers really want from an employer is greater flexibility.
“Finding ways to introduce flexibility into frontline work should be a top priority for every U.S. retailer — particularly those hoping to appeal to Gen Z, draw caregivers back into the workforce, and optimize scheduling across multiple stores or brands,” said Rob Klitsch, director of the retail, hospitality, and food service practice at UKG.
Pandemic-Era Jobseekers Won’t Settle for Subpar, Demand More Than Just Pay
While 63% of retailers say they’ve raised pay for holiday hires — an average increase of $3.90 per hour, year over year — roaring demand for seasonal staff still makes it more challenging than ever for retailers to compete in terms of pay, benefits, and hiring incentives.
“Retailers need to know it’s not just about compensation,” said Dave Gilbertson, vice president at UKG. “It’s about flexibility and showing that you value your associates and are going to keep them safe at work. It’s about training and developing your workforce and making sure people feel that they’re starting a career, versus just working day to day.”
While seven in 10 retailers made direct, long-term investments in their people in 2021 — i.e., raised wages or offered innovative and impactful benefits — others have committed to providing schedule flexibility, job stability, and development opportunities. According to the study:
- 75% cross-train associates to thrive in multiple roles
- 56% provide professional development to help people advance within their company
- 54% engage in labor sharing and allow employees to work across multiple store locations
- 54% guarantee associates a minimum number of scheduled hours per week
- 40% accommodate employees’ availability and preferences when building staff schedules
To dive deeper into the data, read the executive report: Retail’s 2021 Holiday Season Outlook.
Retailers Have Safety Protocols Controlled; Get Ready to Mask Up
Preparing for the holiday shopping season, retailers are bolstering contactless systems and safeguards (81%) and putting managers in charge of enforcing store safety policies. Nearly all retailers think that customers — if given the choice — prefer to shop with as little contact as possible (88%) and expect in-store fulfilment will be even more popular this holiday season than in 2020 (90%).
To protect the health and safety of all, 74% say they’ll require employees to wear masks in stores — and mask mandates for shoppers are even more likely: 45% already require masks for customers entering some or all of their stores, while another 40% say it’s “extremely likely” customers will be required to mask up in at least some stores once the season kicks off.
While few retailers got through the 2020 holiday season without COVID-19 affecting their workforce, 40% expect cases among store staff to be infrequent or non-existent this year — and nearly all (97%) say store managers would know exactly what to do if a team member tests positive.
- Note to editors: Please refer to this report as “Retail’s 2021 Holiday Season Outlook.”
- Gain insight into the state of the frontline working economy during COVID-19, with the monthly UKG Workforce Activity Report.
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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 13,000 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: Survey Methodology: This survey was commissioned by UKG and conducted online between August 31 and September 9, 2021, among a pool of 312 store managers, owners, and executives representing retailers in the U.S. and spanning numerous industry segments, from big-box and department stores to apparel, beauty, consumer electronics, discount, drugstore, home improvement, housewares, sporting goods, and luxury retail. More than half operate 25+ physical stores (56%), employ 500+ employees (53%), and run their own distribution centers (58%).
Footnote 2: Based on the National Retail Federation’s June 9th projection that retail sales could total more than $4.44 trillion, including an estimated $1.09 trillion in non-store and online sales.
Footnote 3: Based on a report from the National Retail Federation that total retail sales in 2020 reached $4.02 trillion, which includes $920 billion in non-store and online sales.
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