‘Tis the season for seasonal labor. This year, it’s an unusual market

The holiday season signals a lot of things for businesses. To many, it means increased sales, an inventory crunch as consumers buy up food and gifts for friends and family, and a sizable portion of yearly revenue coming in a short period of time. For some, it also means hiring more workers. This year, though, companies could face significant challenges.

An ongoing labor shortage has left many companies feeling they will be unable to find the necessary help to deal with what is expected to be an abnormally large holiday season. With some businesses generating as much as 40% to 45% of their revenue in November and December, a failure to meet the high demand could cripple them.

Hear more: The latest Market Dives podcast covers holiday retail, seasonal labor and more.

Seasonal labor is a term used to refer to temporary jobs that appear regularly at certain times of the year, with two of the busiest being the winter holidays and the summer for tourism and agriculture. Overall, the holiday season has generally seen an increase to retail payrolls of 3% to 4%, according to a Pew Research study.

This year, for many workers, a decision to not return to work has been driven by pushback against low wages, long hours and other labor practices that have drawn criticism from workers and advocates. The result is many potential employees holding out for better working conditions.

With companies struggling to hire full-time employees, seasonal labor is almost an afterthought for some employers. That has been the case for Rusty Strodtman, who oversees Columbia Mall for the real estate management company Brookfield Properties.

Strodtman said he has experienced the most difficulty filling positions in food service and sanitation, jobs that are not tied to the holiday cycle.

Peter Mueser, an economics professor at the University of Missouri, said that employers need to look at what they are offering prospective hires as a holistic deal, rather than just a wage.

“When you hire someone, you’re offering a package of goods,” Mueser said. “There’s wages, but, of course, there are things about what the job is like, how hard you work people, flexibility on the job.”

Mueser said this approach can provide an avenue for businesses to avoid raising wages, which some have been hesitant to do.

That’s a strategy Strodtman has gravitated toward. He said that, along with things like free meals at the mall food court, Brookfield has sought other unconventional ways to bring in employees.

“We continue to be creative with incentives, sign-on bonuses,” Strodtman said. “If you work your shifts for a set week, there’s a financial incentive for that.”

Despite record numbers of job openings and people quitting jobs in August and September, respectively, Mueser believes eventually workers will trickle back. With so many jobs being culled at the start of the pandemic, he says there was always going to be a lag, as populations tend to return to work gradually. There might still need to be a nudge in terms of higher wages or better working conditions to reverse the ongoing exodus from low-paying jobs, though.

“It’s an open question as to how long-term that labor shortage will be and to what degree it’ll show up in the form of higher wages for those people,” Mueser said. “In the long run, you don’t expect to have a labor shortage last indefinitely; you expect wages to go up.”

Reporter Colman Mitchell contributed to this story.

Tags:, , , , ,

Leave a Reply

Have you heard?

Missouri Business Alert is participating in CoMoGives2019!

Find out how we plan to use your gift to enhance training and programming for our students