The War for Talent: It’s On
It’s not exactly news that we have a war for talent in the U.S. Since the recession of 2008, business commentators have followed the U.S. population’s return to work. When unemployment was high and workers had no alternatives, they often stayed at jobs regardless of their level of satisfaction or room for advancement. However, now that unemployment is low, and workers have options open to them, experts believe Millennials in particular will make more frequent job transitions.
The retail industry feels the constant pressure to retain quality employees and has taken swift action to remedy it. Recently, Wal-Mart announced that in order to attract, retain and raise morale of its workers, the company would raise the minimum wage to $10/hour beginning February 2016, up from $9/hour last April. The news has been met with both positive and negative reaction from Wal-Mart’s various stakeholder groups. Recently the SEC came out in support of a component of the Dodd-Frank Act that mandates companies to compare publicly the gap between CEO and worker pay which, some analysts believe, will pressure many companies to address wage inequalities.
Against this backdrop we are heading into the holiday season, the retail industry’s busiest season of the year. Will Wal-Mart’s wage hike affect any of its seasonal workers? On the surface, it’s not likely to do so, as the increase does not go into effect until February, long after the last ribbons have been tied on the packages. However, there’s no telling whether the potential for higher wages and possibly long-term employment will encourage some seasonal workers to perform just a little harder this holiday season as they look for a little extra boost in their paycheck come February.
Trend-watchers predicted that shoppers would begin their buying before Halloween and that online sales will rise by almost 14% this season. It remains to be seen whether brick-and-mortar stores will be increasing their staffs, and with it, the big line item in their HR budget. It is also unclear as of yet whether any of these workers will stay through the first part of 2016. However, one thing is certain: jobs are plentiful in the retail industry and the turnover is high. A study found that the average cost for identifying, hiring and training a retail worker with a $10/hour pay rate is more than $3,000. We can all do the math- that’s a big investment, and as wages increase and employees are tempted to job-hop, this could become one of the most vexing issues for retailers.
Until then, we’ll wait to see what this season brings.