Retailers will face tougher challenges during holiday hiring this year

Due to high employee turnover and strong seasonal needs, retail recruiting has always been difficult. But now, changing consumer and candidate expectations are impacting retail recruiting making it more challenging than ever. The new challenges that retailers face will require HR and recruiting to become even more critical business partners to ensure future success for brick and mortar stores

Increased pressure from online competitors

Online shopping for the holidays is growing more popular each year. In 2018 online holiday sales grew by 20% while in-person retailers saw only a modest 5% growth. Furthermore, online retailers are crowding out traditional brands. L Brands, CVS, Bed Bath and Beyond, and Sears have all seen significantly lower performance while online retailers Amazon and Alibaba have surged to the top of the fortune 2000.

Competition from the online availability of products has changed the reasons why consumers visit retail locations. Consumers are expecting more than just products from a retail store, they’re expecting a good experience. Data from VendHQ suggests that one of the primary factors that influence consumers to visit retail stores is strong customer experience. To create these experiences, retailers need workers that can deliver positive face to face customer service and develop a high level of knowledge about products

HR must be a key business partner to manage the transition

Carl Boutet, a Retail Strategist at Genetec, believes the future of retail is going to be “less and less about products and more about what people are going to do and experience in the store.” Businesses that will continue to grow and prosper in the future of retail will need to shift from a product focus to a customer experience focus.

HR and recruiting will be an important business partner for making that transition possible. Your employees are the ones who will be delivering customer experiences. Retailers generated 850 billion in revenues during the 2018 holiday season according to a Mastercard report. It’s important that retailers make the right hires for seasonal temporary workers because the holiday season is a massive opportunity for revenue.

Stiffer competition for candidates

2018 saw a surge of holiday hiring in the U.S. with more than 700,000 positions open. The Palmer Forecast predicts an even greater demand for seasonal workers this season. Unfortunately, the need for additional talent is clashing with the current unemployment rate, which remains low at 3.1% in the U.S. The talent pool is limited abroad as well with the U.K. experiencing a 44 year low in unemployment.

Greg Portell, lead partner in retail with consultant A.T Kearney said: “as unemployment falls, retailers will struggle to find the number of qualified workers they need to fill temp roles.” In response, retailers are starting to look for seasonal talent earlier in the year.

Large retailers kicked off holiday hiring efforts early this year. Kohl’s began their efforts for 500 stores in July and started recruiting for their remaining U.S. stores, and e-commerce fulfillment centers in August. But even that hasn’t been enough to fill positions. Stephen Frank, Managing Director at Manpower, reported “a shortage of drivers (in some locations in the US) so severe that retailers are asking all employees to pitch in by delivering inventory to stores.” Retailers need more workers, but there just aren’t enough people looking for talent.

Improving compensation and benefits will only take you so far

Retailers across the board have needed to provide improved compensation packages and benefits to make temporary positions more attractive. Gap, Kohls, and Target all offer discounted prices, flexible schedules, and wellness offerings to all their seasonal hires. Candidates applying for in-store positions as sales floor associates and nonstore positions in distribution centers, call centers, and online fulfillment are all demanding better compensation packages. However, there is only so much retailers can do to compete on compensation and benefits before increasing wages further becomes economically unfeasible.

Win the war for talent with CAI

With strapped finances due to online competitors and compensation bidding wars, your competitiveness as an employer is going to hinge on your employer brand and the ability to create a positive candidate experience. Conversational AI is a type of recruiting chatbot that can engage in near human-level conversation with candidates in the scope of specific stages of the recruiting process.

Retailers will see the most benefit from applying conversational AI to sourcing, screening, and interview scheduling. Conversational AI can help with sourcing by reaching out to every candidate in your ATS and/or CRM, engaging them in a 2-way dialogue, and scheduling qualified candidates for interviews with your store managers. Similarly, conversational AI can also be deployed to engage candidates immediately after they submit an application.

If they are submitting an application from an online job portal, the conversational AI(CAI) will engage them via a webchat. If they are using a text message-based application, the CAI can engage them via text message instead. In either case, the results for your store managers are the same - a group of qualified candidates automatically scheduled for in-person interviews.

To learn more about how conversational AI for recruiting can enhance your holiday hiring efforts this year book a demo.