To recruit the 2,600 seasonal workers it needs to get through the big holiday season, cataloger Lands’ End has been forced to get creative.
This year, the Dodgeville, Wis., company sent a recruiter to comb the parking lots at the University of Wisconsin at Platteville, 35 miles away. Whenever unsuspecting quarry strolled into sight, she handed them lip-shaped red cards listing Lands’ End’s extensive benefits for part-timers and a chocolate candy kiss. Her offer: Take a job at Lands’ End, and “kiss your holiday worries goodbye.”
Realizing a cute pitch wouldn’t be enough, Lands’ End is running three buses a day to the campus to transport its collegiate work force. It also offers them a year-round employee discount and access to its lavish athletic center if they promise to return next Christmas. They are even eligible for a $500 tuition reimbursement program.
As labor markets have tightened around the country in the past several years, many retailers have had to add such goodies to lure enough workers for the holiday season. But competition for temporary help hasn’t been this fierce since the early 1970s.
Earlier this month, the government reported unemployment had dropped to 4.7 percent in October, a 24-year low, while job growth roared ahead. But if New York and Los Angeles are factored out, the real unemployment rate around the country is more like 4 percent, said Gail Fosler, chief economist of the New York-based Conference Board research group.
“There’s no reason why anybody who wants to work can’t. There’s just a big scramble on,” Fosler said.
And not just in retailing. As stores and other holiday-heavy businesses as diverse as florists and the U.S. Postal Service rush to add upwards of 1 million seasonal workers, other service-sector businesses such as health care, fast food and banking are finding it harder to hold on to workers and find new ones.
In the fast-food industry, worker shortages are squeezing profit margins already reduced by fierce price competition. To stay competitive, a Subway Sandwich Shops franchisee in Tulsa is paying $5.50 to $6 an hour to start and giving raises to employees after only three months on the job.
Burger King has begun paying sign-on and retention bonuses in some markets where labor is at a premium. “We’re holding on to workers for dear life,” said Anthony Austin, Burger King’s vice president/human resources.
Other businesses, such as health-care providers and franchisees, are so strapped for qualified workers that expansions are being stunted.
Where ordinary consumers may feel the labor pinch most, however, is while waiting in line Christmas shopping.
Many of the people retailers would have hired in the past already are working at full-time jobs with better benefits. And even traditional sources of swing labor such as senior citizens, stay-at-home mothers and students can afford to be picky about what offers they accept.
Because of the labor crunch, many retailers may be stuck with poorly qualified or blase candidates, warns Michael K. Evans, professor of economics at Northwestern University’s J.L. Kellogg Graduate School of Management. And that could result in poor service and lower sales in the critical holiday season, Evans said.
The shortage of part-timers has never been worse at Woodfield Mall, the Chicago area’s largest. Unemployment is less than 2 percent in Schaumburg, and the population is aging as young people move away, said Paula Guiliano, Woodfield’s director of marketing.
When the mall tries to recruit workers outside the area, transportation becomes a problem. “People aren’t looking for retail jobs. I could have held five job fairs and it wouldn’t have made any difference,” she sighs.
Sign-on bonuses, flexible hours, dental benefits–those are some of the incentives that innovative companies are using to fill their holiday slots, which include gift wrappers, delivery people, order takers and credit checkers.
Sears, Roebuck and Co. is pretty much on plan for holiday hiring around the country, including Chicago, said spokeswoman Paula Davis. That’s good news because the retailer is trying to improve customer service by expanding its temporary work force by 20 percent this year, higher than the usual 15 percent.
At a Sears store in Novi, Mich., an affluent, far-flung suburb of Detroit, it’s been an uphill battle. Sears managers there have told area charities they will make contributions if the groups successfully refer a worker to Sears. The contribution may run as high as $150 depending on the number of hours worked by the new employee.
The Novi store also has partnered with Detroit’s transportation department to set up a bus route that goes to the mall, making it more convenient for residents of other communities to get there. But even those strategies haven’t yielded enough Sears workers yet, Davis said.
Other businesses in the economy’s enormous service sector are also struggling to find good workers.
Peapod Inc., a computer-based grocery order and delivery company, has seen a deterioration in the pool of workers who apply for its shopping and driving jobs in the past year.
“There used to be a lot more qualified people who had a good work ethic, arrived on time, did a good job, all the basics your mother taught you,” said Toya Campbell, director of human resources at Skokie-based Peapod.
Now, the company is interviewing “a lot of job-hoppers” who probably won’t stick around long, she added. So Peapod tries to screen them out by asking everyone for a resume and doing extensive reference checks.
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Peapod already offers dental benefits and participation in the company’s 401(k) plan to its 900 part-time drivers and shoppers in eight cities around the country. But in ritzy Lake Forest, the lack of workers is so severe Peapod has been forced to offer its shoppers full-time positions with benefits. “The children who live there don’t need to work,” Campbell said.
The worker shortage may have its most telling consequences in the health-care field. In the Chicago area, hospitals, nursing homes and seniors’ health centers are all reporting staff shortages.
“We just can’t find all the people we need,” said Barbara Carter, spokeswoman for the Council for the Jewish Elderly, which provides various services to older people in metro Chicago.
When the council’s new assisted-living center for seniors opened in Deerfield in July, staff was so short that full-time employees were asked to pitch in and help on nights and weekends. The fact the jobs paid a relatively high $7.70 an hour made no difference.
“Now everyone is hiring seasonally, and it’s even more of a problem. Thank goodness we aren’t full yet,” Carter said.
The lack of workers willing to do tasks such as bathing and feeding seniors at home is so profound that some people are being forced into nursing homes, said Wendy Thomas, division manager for senior community services at Catholic Charities.
Nearly full employment, while great for the economy, can be bad for growing businesses. Finding enough workers for her Merry Maids franchise in Wheaton is a year-round challenge for owner Miriam Armstrong. But the task gets even harder around the holidays when regular clients want more services and nobody cancels.
“I’d have a bigger business if I could hire more people,” said Armstrong, who has been in business for five years. To keep her workers from being lured away by retailers, she now guarantees them a regular salary each week, rather than an hourly rate, if they commit to working a set number of hours. Their salary stays the same even if they are needed for fewer hours.
Even StreetWise, a Chicago newspaper sold by homeless people, is feeling the effect of a strong job market. Although the number of active vendors has stayed around 385 to 400, the composition of the work force has changed.
“Our veteran vendors who had really developed a work ethic are disappearing. They’re going to real jobs in the service industry,” said Brendan Shiller, the editor in chief.
A former vendor who still writes the StreetWise horoscope column now works at Bruegger’s Bagels. Another has become a house painter.
In their place is a more transient work force, many with addiction or emotional problems who have lost their public assistance because of welfare reform, Shiller said.
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