When UPS lured holiday job seekers recently to its Columbus, Ohio, package sorting center, it turned the dreary process of interviews and background checks into a full-blown party complete with candy and movie-ticket giveaways.
Faced with a shrinking labor pool and a need to fill 95,000 extra jobs this holiday season, the Louisville-based delivery giant has been left scrambling to find innovative ways to tempt potential employees— including turning recruiting sessions into celebrations.
It’s not just UPS. As the holidays draw closer and holiday hiring is in full swing, industries across the board are feeling the unintended side effects of a falling unemployment rate— now at a 17-year low of 4.1%. But retail, food services and delivery, industries that are an essential part of the holiday grind, are among the most vulnerable.
“It’s definitely a workers’ market,” says Peter Harrison, CEO of Snagajob, an online job search engine, who says companies on the platform are increasingly struggling to find workers. “No question about it. Right now, employers are having to do everything they can to lure people in.”
Starting with pay. Hooplas and giveaways aside, companies know nothing can help them sign up workers faster than the prospect of more cold hard cash and benefits:
• Target. The big-box retailer recently announced it’s increasing the hourly minimum wage to $11 an hour, with plans to go as high as $15 an hour by 2020.
• J.C. Penney. The department store chain will start offering paid time off, up to one week a year, to eligible part-time employees in early 2018.
• UPS. The deliverer known for its distinctive brown trucks offers weekly retention bonuses, up to $200 a week, as a reward to employees who work every day.
As for getting out the word, that’s where the parties come in.
“It’s just another way to reach people,” says Dan McMackin, a UPS spokesperson, who says recruiters also went to football games and Green Day concerts. “The competition for workers means we’ve got to be creative. We need to get out there and talk to everyone.”
Areas with unemployment levels below the national average have been hit the hardest.
In Columbus, for instance, where UPS held its recent holiday recruiting party, the unemployment rate was 3.8% in September, compared to the U.S. rate of 4.2% (the national rate dipped to 4.1% in October). The Columbus area was tied for 168th-lowest in unemployment among 388 metro areas.
Last summer, in Fort Collins, Colo., where the unemployment rate was 1.9% in September, second lowest in the nation, Abbie Lowe, was struggling to staff her store, Neighborhood Liquors. She had a sign on the door for more than a month in addition to the ads posted on Craigslist. Lowe got four resumes.
“Typically, we had a bigger pool to select potential employees from,” Lowe says. “But there are jobs everywhere here. Even day laborers are getting jobs all the time. We can’t keep anyone in here.”
In Exeter, N.H., where the unemployment rate hovers around 2.3%, Ryan Abood, CEO of Gourmet Giftbags, an online retailer that makes upscale gift bags, says he focuses on offering “creature comforts” to lure in holiday-season employees.
“It’s all about creating a good vibe at work,” he says. That includes an office with a pool table, air hockey and ping-pong game.
The company, which sells about a million gift baskets a year, usually triples its full-time workforce during the holiday season from 55 people to around 150. Three years ago, Abood says, he received between 50 and 70 applications. This year he had fewer than 10.
“It’s bad when employers are busing workers to work to get enough people to execute the work we do,” he says. “We would never do that if the talent pool wasn’t so bad. Why would we go through all that extra hassle?”
Some companies are turning to social media or temporary staffing companies to fill the gap— but have had little luck.
“You ask for 10 temps and they send you eight,” says Butch Yamali, CEO of The Dover Group, which owns 12 companies, including restaurants, a catering hall and a construction company in the Nassau County, N.Y. area. Dover Group has more than 1,000 employees.
“You’d just ask a staff member if they have a friend or relative to work,” says Yamali, who says the holidays are the busiest time of year. “There was always some way to find staff. Now it’s impossible. It hurts. People are out spending money but we don’t have enough staff to catch them properly.”
Other companies are leveraging new technology to compete for workers. More than 50 franchisees and corporate partners across the U.S., such as various McDonald’s and Dunkin’ Donuts, began using Instant Financial earlier this year. The service allows employees to be paid by the day instead of waiting until the end of the week or month.
This summer’s string of hurricanes in the South left an even bigger dent in the labor pool, especially among construction workers.
“This is not necessarily a bad thing for the people looking for jobs,” says Jack Kleinhenz, chief economist at the National Retail Federation. “They’re going to find them.”
But for employers, many have been forced to lower their hiring standards.
“A growing number of employers used to have elaborate assessments to get hired,” Harrison says. “They’ve had to dramatically shorten them—or eliminate them all together in some cases. If they make it too hard to apply, then people will just not apply.”
Kellie Ell, USA TODAY