Retail’s Labor Pool – A Mix of Automation and Humanity

by | 28 June 2022

Logistics, supply chain fulfillment, restaurants, hospitality and retail have been most impacted by the residuals of the pandemic, whether from financial stressors or the purported great resignation. Not surprisingly, many employees affected are hourly wage earners, paid the federal minimum wage (and sometimes less).

The retail industry directly employs 32 million Americans, 20% of the U.S. population, making it the largest employer in the private sector. And while the retail sector as a whole experienced a severe loss of nearly 800,000 jobs during the pandemic, the lagging of talent had retailers rethinking benefits and pay incentives before their employees considered alternative forms of employment.

While there are many reasons why most Americans quit their jobs, the following three top the list: low pay, lack of career advancement, and feeling disrespected at work.

Show Me the Money

Six in 10 Americans spend at least some time in a retail position. Upon scanning open positions for retail jobs nationwide, brands are seeking candidates who thrive in a high-performance culture with a skill set that operationally supports the brand’s business, improving sales, profitability, and the company’s overall image. A tall order for a sector that traditionally pays on the lower end of the wage spectrum.

The average salary for a retail store manager is roughly $67K, a little more than double that of a retail sales associate (~$30K). The majority of retail employees rely heavily on hourly wages that range from $7 – $22 and are mainly dependent on the hours scheduled to work. Luckily, some retailers have had an epiphany, raising wages 4.9% above the $15 national minimum wage instituted in January 2022. The most competitive among them, Apple and Bank of America, raised starting wages to $22/hour to stave their employees from leaving the nest. In addition, retailer Walmart is taking a more aggressive approach in the launch of their Colle ge2Career program, which will groom nearly 1,000 current Walmart employees who have recently graduated college into management positions with the potential to make $200,000 annually.

R-E-S-P-E-C-T

In a recent survey, nearly half of retail workers say they have considered quitting their jobs and expressed dismay and frustration in dealing with increased hostility and dismissive behavior from shoppers. Pandemic PTSD is real, coupled with financial insecurities due to the rising cost and inflation and overall exhaustion – when it comes down to it, it’s no surprise so many folks are on-edge. However, some employers like Instacart have shown solidarity with their staff. For example, Instacart recently revamped its customer rating system with a new feature that allows its fleet of shoppers to review customers and, if necessary, block rude patrons – respect works both ways.

Human-less Transactions

According to a McKinsey Report, consumers now strongly prefer zero assistance needed while shopping, with a preference for accessing brand info on their devices over engaging associates. More than 70% of consumers favor in-store self-checkout, with 85% believing it’s faster than a cashier-guided checkout.

Retailers who leveraged the pandemic to incubate automation technologies have started to approach the shopping experience holistically, supporting consumer demand for convenient, contactless transactions. Consumers no longer have a love-hate relationship with technology allowing brands to accelerate purchases, distribution and warehouse fulfillment more efficiently. No brand understands that better than Amazon, but Walmart is catching on fast. The big-box retailer recently broke ground on one of four state-of-the-art automation technology fulfillment centers based in regional markets to compete with the online retailer. In addition to Joliet, Illinois, which will fill more than a thousand supply chain positions, Walmart will follow up with locations in McCordsville, Indiana; Lancaster, Texas; and Greencastle, Pennsylvania.

Despite initial fears, implementing automation is expected to create more new jobs than it replaces by 2025. Good news for per diem employees, as it will require employers to retrain and upskill staff for the future of the work.

It’s not all doom and gloom, though, as the U.S. economy continues to maintain a 3.6% jobless rate, with nearly 400,000 jobs in May, extending a year of steady employment gains. On an even brighter note, analysts anticipate that the economy will add 4.7 million jobs by 2022.