How the Tight Labor Market is Threatening Retailers’ Holiday Hopes

Sourcing Journal – Along with other key economic metrics, the 4 percent unemployment rate has retailers dreaming of a profitable Christmas. With more money in their pockets and more confidence in their economic futures, it’s likely consumers will be in the mood to spend.

But there’s a flip side to that statistic: The current labor market may leave the type of available, educated and helpful seasonal applicants they want in short supply.

“The biggest thing is it is super critical to have properly trained and motivated employees to improve sales and customer satisfaction and moral,” said David Naumann, vice president of marketing at BRP. “Happy and helpful sales associates are the key to driving traffic and sales. It really improves customer satisfaction.”

Naumann says cash is as good an incentive as anything else, especially for anyone living paycheck to paycheck. “The one thing that motivates them is to make more money, so pay raises and bonuses and other things based on performance will go a long way to motivating performance and retention,” he said, adding store discounts and referral bonuses work too.

In a tight labor market when stores are often asking folks to give up weekends and evenings, Naumann said if you find someone good, it’s worth the money to keep them happy. “You don’t want someone to start and then jump ship for another retailer who’s paying $1 an hour more,” he said.

While offering more money is an obvious choice, Naumann said don’t underestimate the value of providing training. “Often the reason why [employees] quit is because they don’t feel like they know what they’re doing or don’t feel comfortable navigating the systems they need to,” he said. “Really it’s about making sure you offer adequate training so your employee has more information than your customer has.” As retailers weigh what lengths they’re willing to go to in order to attract, train and retain employees, Naumann said they need to keep one thing in mind.

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