What is the Great American Labor Shortage?

The labor market has taken a rather unexpected but striking hit due to the pandemic. Businesses all over the United States are looking for workers to fill the open positions. As per the Bureau of Labor Statistics, job openings rose to 9.3 million in April 2021. Many expected the employment numbers to go back up once the world opened up again, but the numbers aren’t there.

Stats suggest that there continues to be a shortage of well-trained workers in the country across all major industries. According to a Chamber of Commerce survey, 90.5% of companies believe that a lack of available workers reduces economic growth in their area.

Many factors have contributed to the Great American Labor Shortage. The past year has caused a few fundamental changes to the economy and the labor market.

Many Americans are now re-assessing their work-life and prioritizing job satisfaction. Stagnant wages and insufficient unemployment benefits have also led to workers feeling underappreciated and hence questioning their career path.

Retail employee at a grocery store

Labor Shortage in Retail

The retail workforce has been under tremendous strain due to the shortage of labor. According to the Bureau of Labor Statistics, the number of retail workers to leave their jobs doubles periodically. The pandemic has only increased their propensity to leave their unsatisfactory, underpaid positions.

In a survey by Zipline, 500 retail associates revealed that they do not feel their employers are dedicating enough effort to improve the workplace. 42% of the respondents even said they are considering or planning to leave their retail jobs once the pandemic is over.

Retail is one of the fastest-growing industries in the United States. In the aftermath of strict lockdowns, more people are willing to visit a brick-and-mortar store to shop The labor crisis will become even more problematic for the retail industry if the shortage becomes worse in the upcoming holiday season.

In June 2019, retail accounted for 15.6 million jobs. The number fell to 15.2 million in May 2021, but it is now tough to find enough workers to take up the jobs. The Department of Labor estimated that there were 965,000 open jobs in the retail industry as of July 2021.

Why does retail suffer from labor shortage?

There are several reasons behind the labor shortage in the retail industry:

1. Unemployment benefits

With the pandemic leaving many retail workers jobless, it was important for the state to provide adequate unemployment benefits. As the Covid-19 situation improved, many states stopped the federally-funded unemployment benefits without taking any measure to improve employment numbers. This left many workers disillusioned and dissatisfied.

2. Retail employee working conditions

There is no doubt that the working conditions for retail employees need improvement. In the absence of strict guidelines and standards, many workers had to tolerate exploitative employers. The pandemic gave them an opportunity to rethink their career and aspire for something better.

Training employee at a hardware store using a laptop

3. Pre-existing medical conditions

The pandemic has instilled health-related fears in many of us and justifiably so. Since retail workers come into contact with customers all day, they have to be extra careful. Those with pre-existing medical conditions are more vulnerable to COVID-19 and hence fearful of returning to their workplace. Many workers are choosing to stay at home until they are fully vaccinated.

4. Employee work-life balance

Due to the pandemic, retail workers remembered the joys of having a thriving life outside of work. They are now willing to fight for a work-life balance. Employee happiness is now largely dependent on whether the job allows them to have a work-life balance.

5. Retail employee scheduling flexibility

Scheduling shifts can be stressful and hectic when one has no control over how their week will turn out. Retail workers now want more flexibility when scheduling their shifts so they can accommodate other work alongside. Many have children or parents to take care of, and they would like the option to drop a shift due to an emergency or earn more by taking extra shifts. While remote teams may not be a feasibility always, team restructuring can be important to improve flexibility.

6. WFH vs. WFO

The pandemic has proved that workers can earn an income effectively without ever leaving the house. Workers who have adjusted to this new work-from-home lifestyle are reluctant to go back to the workplace. They are looking for more suitable jobs.

7. Retail employee satisfaction

More and more retail employees are prioritizing job satisfaction. Erning money is important, but lately it doesn’t make up for mistreatment at the workplace. Workers now have the drive and motivation to demand better treatment and opportunities.

8. Retail employee compensation

The problem of stagnant wages existed in the United States even before the pandemic. Underpaid workers could do little to better their situation. However, the American workers are now demanding their rightful compensation because they are no longer willing to settle for low payment rates.

9. Existing labor skills gap

In the absence of proper retail training, many employees have felt restricted by their limited skill set. The pandemic has only increased the skills gap with retail workers being unable to work and interact with customers over such a long period.

Retail employee giving service to a customer

What are the common mismatches?

In the aftermath of the pandemic, labor shortages in retail can be linked with a mismatch in skills, goals and location.

  • Many workers, despite having an impressive skillset, do not possess the required skills for the job. Retail sales training is one of the best solutions for this problem.
  • With people choosing to move to the suburbs, there is a shortage of eligible workers for urban retail jobs.
  • Post-pandemic retail employees are ready to set higher goals. Their expectations from the workplace are now much greater and companies have to adjust accordingly.

How to retain employees while attracting new talent?

It is now more important than ever for retail companies to devote resources to their labor force and rebuild it. Retaining existing employees is just as important as attracting new talent. The following suggestions might be helpful:

1. Ensure employee satisfaction

To retain your employees for a longer period, you have to invest in their long-term happiness and satisfaction. They will feel a sense of pride, loyalty and commitment to the company, which will prevent them from quitting. Small gestures such as stocking up the snacks pantry have to be coupled with impactful initiatives that will improve employees’ well-being and help them progress.

2. Retail training opportunities

A survey by Axonify revealed that almost one-third of retail employees did not receive proper job training. Without the necessary skills, workers cannot meet the company’s expectations and are doomed to lower wages. They tend to look for other jobs in this scenario. However, proper retail training is the best tool for improving employee retention. Upskilling and reskilling are gaining prominence, with companies deciding to train their existing employees alongside new hires. A structured training program that teaches both soft and technical skills will give excellent results.

Employees training using a mobile phone

3. Let your employees speak for themselves

Collecting employee feedback is the only effective method of knowing whether your training program has been helpful for your employees. Retail employees are always on the floor, and they can give valuable insights if given the opportunity. After gathering the feedback, it is important to act on it so that employees know that their ideas and suggestions have made a difference.

4. Fair Compensation

Ensuring fair compensation for retail employees is the most important step you have to take to increase retention. In the post-pandemic world, retail employees are in charge of their career options, and they are willing to fight for their rightful compensation. Retail giants like Target are increasing their employee wages to motivate workers. Paying your employees well is a great way of guaranteeing their loyalty. It is also important to distribute bonuses and incentives from time to time.

5. Flexibility

Allowing more flexibility about scheduling and organizing shifts will instantly make you attractive as an employer to both existing employees and new hires. You can also make your retail store staff training program flexible by conducting it virtually.

Why do you need Bites?

Proper onboarding process and training techniques will nurture your workforce and increase employee retention. Virtual training solutions allow employees to participate when convenient for them, and they can explore one module at a time. The process of microlearning is effective for candidates who have to complete their training alongside other work-related duties.

Bites is a modern onboarding and training solution that will allow you to communicate with your employees easily. Create different modules and tell your own story through short, easily digestible videos that can be accessed anytime. Share the playlists with your employees through Bites and maintain consistency of training. Bites lets employees give their feedback and ask questions on the forum so that the communication is never one-sided. Track employee progress to identify their strengths and weaknesses so you can make customizations. Well-trained employees are more productive and satisfied with their career growth.