Run the Numbers: Retailers Are Raising Wages for Seasonal Workers Amid Labor Shortage

Run the Numbers, FN’s data column, unpacks the data that’s driving top retail trends in the industry.

Amid a tightening labor market, retailers aiming to get ahead of the competition are rushing their search for holiday workers — and even hiking wages to win over qualified talent ahead of the crucial shopping season.

According to a recent report from staffing startup Wonolo, business leaders and hiring managers have begun increasing their pay rates for gig workers, with companies offering an average of $15.19 per hour for the holidays — an 8% gain from last year’s hourly rate of $14.44.

CREDIT: Wonolo

The most in-demand jobs were in the merchandising, administrative and customer service departments. With retail sales typically peaking during the holidays, the firm tracked a 13% climb in total pay for seasonal jobs and a 6% jump in hourly pay. The yearly average rose from $14.59 per hour to $15.44 per hour. Merchandising itself emerged as the highest-paying category, at $113.20 per job, according to the report.

CREDIT: Wonolo

Moreover, from coast to coast, Wonolo noted that companies in the Southern California region provided the highest hourly pay, at $18.59, while the New York City and New Jersey markets followed a close second, with hourly wages of $18.41. (Both figures marked a 15% surge in pay for each market compared with the average annual hourly wage.)

CREDIT: Wonolo

Wonolo’s report added that companies tend to raise wages as early as August and to steadily continue doing so from late summer until the end of the year. The move comes at a time when the unemployment rate is hovering near a 50-year low of 3.7%, giving workers a bargaining chip as retailers struggle to staff up vacant positions.

Last week, Target announced plans to add more than 130,000 temporary employees for the holidays — an increase from the 120,000 it hired last year. About 125,000 positions will be in stores, while 8,000 will be at fulfillment and distribution centers. It also will double the number of seasonal hires focused on completing online orders from its 1,800-plus digital outposts.

Separately, Kohl’s got an early start in mid-July when it put out a call for seasonal workers — months before annual hiring sprees typically begin. At the time, it had already started staffing up across 500 of its stores for the back-to-school and holiday seasons — nearly double the number of locations seeking “early wave” positions compared to last year.

According to a recent survey by Chicago-based outplacement firm Challenger, Gray & Christmas, 70% of employers reported difficulty finding qualified candidates for job openings, prompting many companies to now offer flexible schedules and time-off benefits to attract talent.

“Employers are having trouble finding workers with the skills needed to perform their duties. If this continues, it could hurt the bottom line and limit expansion,” VP Andrew Challenger said. “As employees — especially millennials and Generation Z workers — demand more work-life balance, employers will find they must respond with these offerings.”

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Amazon Is on a Hiring Spree — Here’s How It Plans to Fill 30,000 Jobs in a Tight Labor Market

Kohl’s Is Already Hiring for the Holidays — What This Means for the Retail Jobs Market

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