The service-sector end: Retailers are increasing pay and benefits for store workers, as well as those who work in fulfillment and transportation.
Apple plans to significantly increase the benefits it provides US retail store workers, per Bloomberg.
- Amazon in September boosted its average starting wage for fulfillment and transportation workers to $18 an hour along with comprehensive benefits worth an additional $3.50 per hour, per a company release.
CVS last year boosted its hourly wage to $15 an hour, per a company release.
Walmart has made several moves over the past year to improve its employer-sponsored digital health benefits.
- While retailers tend to lay off large swaths of seasonal workers in January, many did not do so this year due to the difficulties attracting and retaining service-sector workers. “Businesses are hoarding labor,” Mickey Levy, chief US economist at Berenberg Capital Markets, told The Washington Post.
A broader context: The Great Resignation is making it difficult to hire and retain workers.
- More than 4 million Americans quit their jobs in July, and that pace of resignations has continued. About 4.3 million Americans, or 2.9% of workers, quit their jobs in December, per the US Bureau of Labor Statistics (BLS).
- To retain workers, 14.5% of private-sector businesses have increased their base wages, per BLS.
- Around 63% of brick and mortar retail tenants are currently in hiring mode, and about 71% of that group said it is harder to find qualified job candidates than in the past, per a Levin Management survey.
The takeaway: The tight labor market is empowering workers. In addition to the fierce competition for top technology talent, retailers also have to pay heed to the consumer-facing workers who are the public face of their organizations. If they fail to find ways to keep their employees satisfied, they’ll likely lose staff, causing their customer experience to suffer.