Understanding the Retail Worker Shortage

Retail is a vital industry that touches all of our daily lives. Whether we’re shopping for clothes, groceries, or electronics, we rely on retail workers to help us find what we need and make our purchases. However, the retail industry is currently facing a severe worker shortage. This shortage has the potential to cause major disruptions to the way we shop and live our lives.

In this article, we will dive deep into the reasons behind the retail worker shortage and its effects on the industry. Finally, we will also look at how innovative solutions like Adia’s on-demand staffing platform can help retailers adapt to the current labor shortage. This article is a must-read for anyone in the retail industry looking for ways to combat the effects of the labor shortage.



What Does Worker Shortage Mean?

The retail worker shortage is a growing concern for businesses and consumers alike. It is a problem that affects many different industries and has also resulted in a hospitality labor shortage. But in the retail sector, the labor shortage issue is particularly pronounced. 

On a day-to-day basis, the shortage can manifest in a variety of ways. For example, stores may have longer wait times for customers, as there are fewer employees available to help them. In some cases, stores may have to close early or limit the number of customers they can serve at one time, as they don’t have enough staff to cover all shifts. This can lead to inconsistent service and a lack of continuity for customers.

The worker shortage also affects the store’s productivity and efficiency. With fewer employees, store managers must work harder to ensure that tasks are completed on time and to the best of their abilities. This can lead to burnout, which can further exacerbate the staffing shortage. Additionally, retailers may have to spend more on recruitment and training, which can reduce their profit margins and make it more difficult for them to stay competitive in the market.

It is important to note that the worker shortage in retail is not a new problem, but it is becoming more pressing as the competition for workers during the shortage becomes more intense. Therefore, it is essential for retailers to understand the causes of the retail labor shortage and to take steps to address it.

Retail Worker Shortage in 2022 in Numbers

The current staffing issues are caused by a combination of factors, including a strong economy leading to low unemployment rates, an aging population, and a lack of interest in retail jobs among younger workers.

In 2020 many people were forced to make employment adjustments in response to the news of the COVID-19 pandemic. As a result, the country experienced 16,308,000 total job separations in March 2020 alone. 

Following this surge, the numbers dropped to 4,618,000 total separations in May 2020. But unfortunately, the number of total separations has increased since. In November 2021, the number of total separations reached approximately 6.3 million, up 382,000 from the prior month. Of the 6,273,000 total job separations in November 2021, 4,527,000 were quits.

The acute shortage of workers continued into 2022, with a record of approximately 5 million more job openings than unemployed people in the U.S. in March 2022, according to the U.S. Bureau of Labor Statistics.

The gap between available positions and the unemployed has continued to grow since, and retailers are aware of its disruptions to their business. According to a survey on retail executive expectations from Deloitte, 70% of respondents agreed that employee shortages will hamper growth.

How Did the Shortage Get This Bad?

The current retail staffing shortage can be attributed to a number of historical factors that have played a direct role in the issue.

COVID-19 has had a significant impact on the current shortage. The pandemic has caused many retailers to close their doors temporarily, leaving many retail employees out of work. Additionally, concerns about health and safety have led to increased demand for staff, as retailers have had to hire more employees to ensure compliance with social distancing and other safety measures.

Big box stores have also contributed to the retail labor shortage. These large retailers have been able to offer lower prices to consumers by operating on a large scale, focusing on growth over sustainability. This has made it difficult for smaller retailers to compete, and because of this, many small retailers have been left with no choice but to close their doors.

Worker burnout is another factor that has directly contributed to the shortage in retail workers. Retail employees often work long hours and are required to be on their feet for extended periods of time. Furthermore, poor labor forecasting can lead to understaffing, and the retail labor shortage has placed even more pressure on existing employees to keep understaffed retail businesses afloat. This pressure can lead to burnout and cause employees to leave the industry in search of less physically and mentally stressful roles.

Online shopping has also played a role. As more consumers turn to the internet to make their purchases, retailers have had to adapt their business models to keep up. This has led to a shift away from traditional brick-and-mortar stores and towards e-commerce, which has reduced the number of retail employees needed.

All of these factors have contributed to the current shortage, making it difficult for retailers to find and retain employees. As a result, retailers may have to adapt their business models and find new ways to attract and retain employees, such as offering higher wages, better benefits, and more flexible schedules.



What Are the Main Causes for Workers Avoiding Retail Positions?

So why is there a shortage of workers to fill positions in the retail industry? There are various factors that have caused workers to avoid retail positions, further contributing to labor shortages. Although the major causes discussed above have had a huge impact on labor shortages among all industries, there are some retail-specific issues that have further impacted the availability of labor in the retail industry. Read on to learn more about how these issues are causing workers to avoid retail positions.


Job Instability

Job instability is a major factor contributing to the current retail labor shortage. The retail industry has been known for its high turnover rate and lack of retail labor job security, with retailers frequently overstaffing and then laying off employees as business conditions change. The COVID-19 pandemic has only exacerbated this issue, with many retailers struggling to keep their doors open as consumer spending dropped and e-commerce sales surged.

Overstaffing is a major contributor to job instability in the retail industry. Retailers often hire more employees than they need to keep their physical stores running and then find themselves with too many employees when business conditions change. This can lead to layoffs, which can make it difficult for workers to find stable employment.

Mass layoffs have also been a significant issue in the retail industry in the past year. The COVID-19 pandemic has forced many retailers to scale back their physical store operations or close them altogether. As a result, many retailers have been forced to lay off employees to cut costs and stay afloat financially. This has led to a surplus of workers looking for employment and making it difficult for those who were laid off to find new jobs in the retail industry.

This retail job instability has led many workers to seek more stable jobs in other industries. This has contributed to the labor issue as many retailers are struggling to fill open positions, exacerbating the worker shortage in the retail industry.


Low Wages

The current retail labor shortage is being caused in part by low wages. Many retailers fail to provide a living wage for their workers, which is the minimum income amount necessary for an employee to meet their basic needs. 

According to data from MIT Living Wage Calculator, the national average living wage in 2022 is $24.16 per hour, or $50,249 annually, for one worker in a family of two full-time working adults and two children. The national average living wage of one full-time working adult with no children in 2022 is $17.46 per hour or $36,311 annually.

However, the national average wage for a retail sales person is $14.03 per hour, or $29,180 per year, according to the most recent data available from the Bureau of Labor Statistics.

As these numbers demonstrate, many retail workers are paid significantly less than the living wage. Working for low wages makes it hard for retail workers to make ends meet, and therefore workers often seek out work in other, more lucrative industries offering roles with competitive wages

The low wages offered by retailers are making it difficult to attract and retain employees in the industry. This inability to bring on new retail workers has been especially challenging for retail businesses that operate in areas with a high cost of living, where workers need to earn higher wages to afford basic necessities. This has further contributed to the lack of workers willing to fill retail positions.


Poor Incentives

Poor incentives are another factor that has strongly contributed to the labor shortage we are seeing in retail. In recent years following COVID-19, more positions have been supporting work-from-home arrangements. This has led to work-life balance becoming a more significant priority for many workers. The growing popularity of work-from-home opportunities and the focus on work-life balance means that retailers need to increase their incentives and benefits to attract and retain employees. 

Retail jobs are often known to be low-paying and physically demanding, with long hours and little room for career advancement. With more options available for workers to choose from, thanks to the labor shortage, they are looking for jobs that offer more perks and work-life balance opportunities. This means workers are favoring positions with better pay and benefits, as well as those with more flexible schedules and the ability to work remotely. 

Retailers that do not offer these incentives will likely struggle to compete with the businesses that do when trying to find and retain employees. Therefore, retailers need to increase their incentives and benefits to attract and retain employees in order to stay competitive and combat the effects of the current shortage.


Lack of Career Advancement

Another cause of the current labor shortage in retail is a lack of career advancement opportunities for retail workers. Retail jobs are often viewed as “dead-end” jobs in that they are commonly lacking in opportunities for growth and development. 

This tendency for retail jobs to lack career advancement opportunities can be attributed to a variety of reasons. Retail companies often have flatter organizational structures, with fewer management positions available. Additionally, many retail jobs are considered entry-level positions and may not offer the same level of advancement as other industries. Furthermore, the industry is constantly changing, and retailers often have to adapt quickly to the changes in consumer behavior and technology, which can lead to a lack of stability, making it harder for employees to see a clear path to advancement.

Workers usually favor jobs where they can see the potential for long-term career growth. Therefore, the lack of career advancement opportunities in retail positions can make it difficult for retailers to attract and retain new staff members.


Bad Working Conditions

The current worker shortage is also fueled in part by the poor working conditions that accompany retail positions. Retail workers often have to suffer subpar working conditions when compared to other industries. These working conditions can include long hours, low pay, high physical demands, and lack of benefits. 

Retail jobs are often considered to be blue-collar positions, and as a result, many retailers do not invest in providing good working conditions for their employees. Additionally, the high turnover rate in the retail industry can make it difficult for employers to justify investing in creating better working conditions, as they may not see the long-term benefits. 

However, retail workers navigate this challenging work structure in order for the business to make profits. With all of these negative working conditions, workers often find their retail roles unappealing and leave them to work in other industries with better conditions. The poor working conditions are making it difficult to retain and attract workers to the retail industry, and this can have incredibly negative consequences for retail businesses that rely on their labor.



Combat Retail Staffing Issues With Adia

The labor shortage issue is detrimental to retailers and will continue to cause negative effects unless changes are made. Retailers must adapt their business models and take on new initiatives to attract and retain retail workers. By making changes like offering higher wages, more flexible schedules, more career advancement opportunities, and better benefits, they can mitigate the effects of the shortage and continue to thrive.

Adia’s on-demand staffing platform also can help businesses combat the effects of the retail worker shortage by providing a flexible and efficient solution for businesses to find and hire qualified employees. The platform connects businesses with a pool of pre-vetted and qualified candidates who are available to work on short notice, allowing retailers to quickly fill open positions. Additionally, the platform allows businesses to offer flexible scheduling options to employees, which can help attract and retain workers in an industry where work-life balance is becoming increasingly important. By using Adia’s platform, businesses can improve the efficiency of their hiring process.

If you are a retail business looking to combat the effects of the labor shortage, sign up for Adia’s on-demand staffing platform today to start hiring qualified candidates quickly and easily.

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