Retailers are facing a worker crisis.
The number of open retail positions has been growing, while the industry’s labour pool has been shrinking, according to data from the job site Indeed.
Retail job openings posted on the website increased 26% to 530,477 in the 12 months ending in September.
But interest in those jobs — which Indeed measures by the number of clicks on the postings — has waned, dropping 9% overall.
This chart shows job seekers’ interest score for retail openings.
“Our data shows that there is less job seeker interest in retail positions this year even as retail postings have grown onIndeed, and the major retailers are indicating that they are seeking seasonal hires equal to or greater than last year,” Indeed Chief Economist Tara Sinclair told Business Insider.
“This would indicate tightness in the market that can be a challenge for employers,” she said.
The tightening market is good news for workers.
It’s forcing many retailers, such as Walmart, Target, and TJ Maxx, to raise wages and improve worker benefits, such as medical coverage, to better compete for employees.
increased its starting salary for workers to $US9 an hour, and it’s planning to bump it to $US10 next year. The move will affect 500,000 workers out of the 1.3 million that Walmart employs in the US.
After Walmart announced its wage increase, Target and TJ Maxx quickly followed suit. Target said it would raise its starting salary to $US9 an hour and TJ Maxx said its starting hourly wages would increase to $US10 by 2016.
The average retail worker in the US makes $US10.29 an hour, or $US21,390 annually, according to the Bureau of Labour Statistics.
Some retailers are also looking at ways to provide their employees with more consistent scheduling — which is rare in the retail industry — to attract more workers.
Walmart, for example, will start offering some workers the ability next year to work the same shifts on the same days every week.
But the improvements that Walmart, Target, and TJ Maxx have made for workers remain far less attractive than the offers at some other retailers like Container Store, which pays employees an average of $US48,000 a year.
The employee turnover rate at Container Store is roughly 10% annually, compared to the 66% average annual turnover rate for the retail industry in 2014, according to data cited by the Wall Street Journal earlier this year.
Costco also enjoys low turnover. The retailer starts employees at $US11.50 an hour and those who stay longer than five years can earn more than $US20 an hour, according to Bloomberg.
Costco’s annual turnover rate is less than 6%, USA Today reported in 2014.
Low turnover is a major cost saver for retailers because of the time and money it takes to train new employees.
Companies that can’t attract and retain employees in the increasingly competitive market may be forced to operate with fewer workers than they need, which could cause some problems during the busy holiday season, Sinclair said.
“Employers are working to make their jobs more appealing, just not fast enough given the competition in the market today,” she told Business Insider.
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