Labour woes hinder retailers’ goal of challenging Amazon.com

Bloomberg

Brick-and-mortar retailers hoping to fend off Amazon.com Inc. need to deploy the one weapon that could set them apart: top-notch customer service, provided by
actual humans.
But making that goal a reality relies on something they’ve not really invested in—well-trained employees with the kinds of wages and regular hours that make them want to stick around.
This illustrates traditional
retailers’ dilemma. In the face of existential threats such as e-commerce and declining mall traffic, more generous pay might improve service. But it comes at the risk of spooking skeptical investors, who are already closely monitoring costs and margins. “It’s a delicate tightrope, where retailers that are watching their profit squeezed need to figure out where to cut,” said Simeon Siegel, an analyst at Instinet LLC. “Looking at the people who drive that business as an asset instead of a liability is difficult.”

Holiday Hiring
As they boost payrolls during the crucial holiday shopping season, chains are mostly sticking to low-wage and part-time positions. With unemployment at an almost 17-year low and a broader shortage of workers, it’s a tough time to change the long-established model. While some major players, including Wal-Mart Stores Inc. and Target Corp., have announced plans to increase pay, low wages persist. Workers say they can’t get the flexible hours they want, and hiring part-timers remains a common way out to avoid spending more on benefits and perks.
“It’s definitely a tighter job market, but the wage power is all with the employer,” said Scott Brown, chief economist at Raymond James Financial Inc. in St. Petersburg, Florida. Chains don’t see the need to increase compensation or add more full-time positions, he said. “Retail is usually seen as being low on the food chain, so you’re not going to see much pressure, even during the holidays.”
Target has said it will hire a record 100,000 temporary workers this holiday season, while Macy’s Inc. will add as many as 87,000. Chains traditionally add to their payrolls this time of year to deal with heightened demand and store traffic.
S. Mahmud, who works two part-time retail jobs in New York, sees the industry as a temporary stop before moving on to something better. She had hoped to earn extra cash this holiday season, but so far has been unable to do so. “They don’t want to give you full-time,” said Mahmud. Neither of her two employers is willing to move her up to a full-time position with regular benefits. Her wages have barely changed. She’s in a management-training programme after having completed her four-year degree, and doesn’t expect to be working in retail forever.
“Retailers say they’re trying to staff up, but the easiest thing to do would be to offer their part-time workers full-time jobs,” said Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union.
Forty-seven percent of frontline employees—sales associates and cashiers—work part-time, according to a survey from the Fair Workweek Initiative. Part-time workers reported an hourly wage of 32 cents less than their full-time colleagues, with hours fluctuating from 16 to 29 per week. That may need to change, and soon, if retailers mean what they say about creating memorable experiences to win over shoppers.