Target said Thursday that it is taking a different approach to staffing this holiday season to prepare for an onslaught of shoppers in stores and on its website: it will cut seasonal hires and give existing employees more hours.
Overall, the discounter expects that the current branch employees – a total of around 300,000 people – will work 5 million more hours during the Christmas period. That means more than $ 75 million in extra salary, it said.
Target still plans to hire about 100,000 seasonal workers – but that’s less than the 130,000+ it hired in the last two holiday seasons, the company said.
The wholesaler with more than 1,900 branches and around 350,000 employees launched an app this summer that makes it easier for branch employees to take on an occasional shift. It allows employees to choose times or swap hours as needed to accommodate other commitments such as parenting or attending college.
“The pandemic has made it clear that our team members need flexibility,” said Target’s HR manager Melissa Kremer.
Retailers, including Target, are preparing for a holiday season that will be both busy and fraught with complications. According to three separate forecasts from Bain & Company, Deloitte and Mastercard SpendingPulse, sales are expected to grow at least 7% year over year in November and December. However, industry analysts say customers should expect fewer deals, more inventory and delivery delays as pandemic-related supply chain challenges spread around the world.
Staffing has also become a key challenge as many struggle to fill vacancies and retain employees – an issue that can lead to empty shelves, sloppy stores, lengthy checkout lines, and other frustrations.
Korn Ferry, a talent consulting firm, surveyed 176 U.S. retailers earlier this month to find out if companies were having problems hiring, and only 2% responded that it was not a problem.
When asked what measures companies were taking to increase their workforce before the holidays, 74 companies said that part-time workers should take on extra hours; 63 indicated that full-time workers were asked to work longer shifts; and 34 retailers said store opening hours will be reduced. Only 15 companies said Korn Ferry staffing was not an issue.
Target’s Kremer said the strategy of giving more hours to existing staff is part of a broader drive to attract and retain a highly skilled workforce. She referred to the multi-year efforts to raise Target’s minimum wage that began before the pandemic. A starting salary of at least $ 15 an hour went into effect in July.
That fall, Target also launched a debt-free educational assistance program that covers tuition and contributes to graduate programs. Walmart already had a similar program, and Amazon recently announced the creation of its own program. Many retailers have also raised wages.
Mark Schindele, Target’s chief stores officer, said the company listened to employees and tried to cater to their preferences. He said many asked for extra hours and more stable schedules, which in some cases qualified them for health insurance and other benefits. Another group was looking for more flexible jobs to balance childcare, college courses, or other aspects of life.
On average, the hourly employees worked almost 15% more hours than a year ago.
Kremer said sales had fallen to a five-year low in the past two years. The company declined to provide that rate, but said sales this year were slightly higher than in 2020.
Schindele said approximately 24,000 of the employees are “on-demand employees” – a pool of part-time workers that he expects to grow.
Craig Rowley, Senior Client Partner at Korn Ferry and director of retail practice for the company, said he recently spoke to a number of retail companies who say they have fewer problems getting permanent employees, but that it is much harder to get them win seasonal help.
That’s because of a number of factors, Rowley said, but mostly because many Americans are cluttered with cash and don’t have to go to extra work to be able to afford gifts for loved ones.
“I don’t think stores will be open until midnight or one in the morning this holiday when they can’t find staff,” Rowley said. “It’s hard enough to get people to work during the day, and getting people to work the night shifts will be even more difficult.”
Still, a number of retailers have set high hiring goals ahead of the vacation rush.
Macy’s plans to hire 76,000 full- and part-time employees in its stores, call centers and warehouses, marking a return to the pre-pandemic department store chain’s seasonal hires. About 48,000 of those spots are Christmas-specific, the company said, while the rest are set to be permanently extended.
Kohl hopes to be able to employ around 90,000 seasonal workers. The company said it was offering a unique bonus between $ 100 and $ 400 for all hourly vacation workers.
Walmart has not yet announced any seasonal hiring plans, but has announced it is recruiting 20,000 employees for permanent positions in the supply chain such as cargo handlers and order fillers.
But according to Joel Bines, Global Co-Leader of the Retail Practice at consulting firm AlixPartners, it’s hard to count how many of these positions will end up being filled.
“We don’t have good accounting from companies that said: [they] wanted to hire 100,000 seasonal workers. How many did you hire? “He asked.
He also doesn’t think it is a wise strategy to rely entirely on a retailer’s current workforce, as online orders become inundated and shoppers pile up in stores.
“You will absolutely exhaust your existing workforce if you don’t prepare,” added Bines. “The holidays are an eight to twelve week season.”