“Currently, it is a candidate’s market. There are plenty of roles to choose from, so they can pick and choose,” Gabrielle Roux, Sheike’s head of retail, told Inside Retail.
Like many retailers, the Sydney-based women’s fashion brand has job openings across all areas of the business, from stores to the head office.
“I couldn’t even pinpoint one type of role which is harder [to fill] than others,” Roux said.
What’s driving the labour crisis
Whereas retailers could once count on receiving dozens of applications for a vacant position, now they’re lucky to get 10, Roux said.
“I think one of the main reasons is that many people exited retail during Covid [and moved] to industries that had more stability and frequent work. Since reopening, there doesn’t seem to have been a significant return to retail. People have chosen different paths,” she said.
Another contributing factor is the lack of skilled foreign workers and international students due to ongoing travel restrictions and backlogs in visa offices.
Paul Zahra, CEO of the Australian Retailers Association, recently called for the removal of red tape around immigration after the Australian Bureau of Statistics (ABS) revealed there were 40,300 job vacancies in Australia’s retail industry in May, a 38.5 per cent increase compared to February this year.
“The ABS figures confirm the results of a recent survey of ARA members,” he said. “Not one of them said labour shortages had improved over the past three months and 84 per cent said it’s becoming much harder to find and recruit new team members – a dire situation for our industry.”
It’s the same picture in the US, where retail job openings were up 37.7 per cent in December 2021, compared to December 2019, according to the Bureau of Labor Statistics.
Paying the cost of understaffing
One of the biggest knock-on effects from the labour shortage is customer dissatisfaction due to poor service levels.
“Without engaged employees, it isn’t possible to create memorable and personalised experiences for customers,” Jeff Clarke, Ceridian’s director of value advisory Asia Pacific and Japan, told Inside Retail.
“The creation of valuable in-person experiences is only possible when retailers have adequate staff who are trained.”
Being understaffed could have a significant monetary impact on businesses, but it’s not the only negative consequence at a time when retailer are already facing increasing macroeconomic challenge.
“The health repercussions [for existing staff] also need to be taken into consideration,” Clarke said.
“Most Australian workers (85 per cent) have experienced burnout over the past year, with more than one-third (43 per cent) reporting high or extreme levels. Not surprisingly, when faced with burnout, many also report losing interest in their work or appear less focused.”
Hiring by any means necessary
Ceridian’s Executive Survey recently found that the labour shortage is one of the top barriers facing retail leaders right now, so it’s not surprising that many businesses are looking to fill roles by any means necessary.
In the US, Amazon and Dollar General were offering sizeable signing bonuses for seasonal workers last year, while Best Buy promised perks, such as discounted gym memberships and savings on home, car and pet insurance, according to the Financial Times.
Roux said this kind of thing is happening in Australia, too.
“I have heard of some pretty crazy things being offered to attract people to the roles, however, I think that can be a dangerous path,” she said.
“It’s really important that there is alignment with people coming into any business and also a realistic expectation set from the outset, so we are trying to attract talent through authentically connecting and really looking to see how we can align with people’s goals.”
Other businesses are looking beyond the traditional job-seeker platforms to fill roles. Ceridian found that 99 per cent of retail executives in Australia are considering hiring former employees, known as ‘boomerang’ workers.
“When managed correctly, boomerang hires offer managers and companies a unique opportunity to cope with the current skills shortage as these employees have the foundational know-how of the business,” Clarke said.
“What retailers need to understand, however, is that without a clear understanding of why the employee left and what has or hasn’t changed with their expectations, they present a risk to the stability of teams who may be unsettled by the revolving door.”
Retaining staff just as important
In a tight labour market, retaining staff is just as important as hiring new workers.
“We are doing what we can to retain staff,” Esther Labi, founder and CEO of Sydney-based lingerie retailer Storm in a D Cup, told Inside Retail.
That includes taking her team out for bowling nights and staff dinners and offering them trips to Melbourne.
“Other businesses that are trying to poach staff are offering all types of incentives but most people can see through them,” she said.
Sheike just hosted its first ever national conference for team members, which Roux sees as an important part of the brand’s employee engagement efforts.
“We are exploring some other ways that we as a business can continue to engage our team from a holistic level to ensure we are delivering an exceptional place to be,” she said.