It's common for retailers to need more hands on deck during the holiday season when more shoppers flock to stores. Last year, many consumers stayed out of stores and did more shopping online -- but that was when COVID-19 vaccines weren't yet available to the general public. This year, stores could see an influx of customers -- and retailers could enjoy an uptick in revenue. But they'll need staff to pull that off, and that could be a challenge.
Right now, many industries are grappling with labor shortages, and retailers are no exception. Last month, Korn Ferry, a talent consulting firm, asked 176 U.S. retailers whether they were having difficulty hiring, and only 2% responded that staffing wasn't an issue.
Meanwhile, retail sales are expected to increase this year. Consumers might spend up to 9% more, and that's revenue retailers don't want to give up. That's why Target (NYSE: TGT) is taking a different approach to holiday staffing this year. And it's a model other retailers may want to follow -- not just during the holidays, but across the board.
Gearing up for a holiday boom
There are several factors at play that could threaten retailers' holiday revenues this year. The first is supply chain and shipping issues that could leave shelves bare. The second is a lack of available workers.
Target hopes to solve the latter by cutting back on seasonal workers and giving more hours to existing employees. The big-box giant says it expects its current staff -- about 300,000 people in total -- to work 5 million more hours in the course of the holiday season.
What's in it for those workers? A cool $75 million in extra pay.
Now, Target does still intend to hire seasonal workers -- about 100,000. But that's fewer workers than the 130,000 it's hired over the past two holiday seasons.
Why the shift? Target recognizes that many of its current workers would likely appreciate the chance to boost their earnings. And increasing hours for existing staff means spending less time and money hiring and training new staff.
This summer, Target launched an app that makes it easy for store workers to sign up for additional shifts. Employees can also swap shifts as needed and choose their hours based on their schedules. Parents, for example, can time their shifts to coincide with available childcare, while college students can arrange their shifts around their classes. All told, it's an easy, convenient model that everyone stands to gain from.
Other retailers can learn a lesson from Target
Many retailers still need a surge in revenue to compensate for sluggish sales in 2020, so they can't afford not to take advantage of the holiday shopping rush. Stores struggling to hire should consider making it easy for existing employees to increase their hours in a manner that works for them.
Incidentally, that's a good practice to uphold in general. Retailers aren't exactly known to pay generous wages, so it's not shocking that workers aren't flocking to submit applications -- especially during a pandemic, when the idea of a customer-facing job may be unappealing even for much higher pay. The more flexible that retailers are willing to be, the more revenue they might enjoy not just during the holiday season but in the coming years as well.
Meanwhile, real estate investors are banking on retailers having a strong holiday season. The last thing those investors want to see is another string of store closures, and if retailers manage to staff strategically, that's a scenario that may be more than avoidable.