Desperate for labor, retailers offer workers more hours
Posted November 1, 2018 6:36 a.m. EDT
(CNN) — It's three weeks to Black Friday, and retailers have a problem.
They're expecting a bumper holiday shopping season, but in the tightest labor market in nearly half a century, recruiting the legions of temporary workers who usually help out at the end of the year is proving difficult.
One solution: Offer workers more hours, which can make them eligible for health benefits and other accoutrements of full-time work.
"These candidates are demanding 40 hours a week, and they can," says Erika Mendez, senior vice president of a staffing firm called Pyramid Consulting Group. "A lot of the power is in their hands, and the employer has to bend to that power."
It's a step away from the part-time model that retailers have adopted to save money on wages and benefits when store traffic is slow.
Retail still trails industries that require skilled labor. Manufacturing and construction workers now average 40.8 and 38.9 hours respectively. But the Bureau of Labor Statistics reported in September that the average workweek for retail jobs has rebounded to 31 hours, up from a low of 29.4 hours in early 2014.
According to an analysis by the career website Indeed.com, jobs in retail experienced the largest decline in the share of all jobs posted that are part-time since 2016 — by nearly 40% in some positions.
"It is my understanding that in order to attract people, we are giving them additional hours," says Jack Kleinhenz, chief economist at the National Retail Federation.
Those hours might not be from nine to five, but they can at least allow people to make a living without having to work another job in between.
That move has been a long time coming. The percentage of workers employed part time because they couldn't find full time jobs trailed the unemployment rate after the last recession. But it is now almost back to its pre-recession level.
Additional working hours are the main factor pushing household incomes higher, even as hourly wages have barely outpaced inflation. That may start to change as companies are forced to compete with retail and distribution giant Amazon, whose $15 minimum wage goes into effect across America November 1.
The change is already apparent to workers like Jay Marzan, who recently landed a full-time job working at an electronics store in Brooklyn.
She had been making a living on short-term retail pop-ups and fashion shows ever since losing her job at a hotel in Fort Lee, New Jersey, in mid-2017. She worked a few weeks at a time, selling everything from Sharper Image gadgets to makeup. It was exciting: One time an employer even flew her to London to promote singer Rihanna's lingerie line.
"I kind of liked working projects, because it was never dull," says Marzan, who also works as a DJ on the side.
But sometimes the jobs would fall through, and a volatile income made it hard to maintain her health coverage or plan for the future.
"Do I want to have a life insurance policy? Do I want to have the income coming in? Do I want to have my company paying for my health insurance?" Even for Marzan, who enjoyed the variety of on-and-off work, the answer to those questions was yes.
Existing employees are also seeing the effect of the tightening market.
Adecco, one of the country's largest staffing and recruiting agencies, says that employers are learning that giving additional hours to existing employees rather than hiring more of them means less time spent on training and recruiting. Some of them are now even offering bonuses — on top of overtime pay — for working more than 45 hours a week.
"In terms of our clients, their number one objective is to increase their productivity, and they usually prefer to do that through technology," says Adecco Senior Vice President Amy Glaser. "Usually their last go-to is extending work hours, but there are some advantages."
In addition, full-time workers tend to become better at their jobs, which can mean employers don't have to hire as many. And they're less likely to jump somewhere else for marginally higher wages, reducing turnover costs.
A study at the Gap released this year found that sales and productivity rose when workers were guaranteed a minimum number of hours, consistent shifts, and schedules in advance.
"I think there is growing awareness by business that improving the stability and predictability of workers' schedules can be good for them and for employees," says Susan Lambert, an associate professor at the University of Chicago's School of Social Administration who helped conduct the Gap study.
And even with unemployment low, there's still plenty of slack in the market among workers who want more hours — which could be a hidden saving grace at a time when retailers have announced 700,000 new holiday positions, the most since the outplacement firm Challenger, Gray and Christmas started tracking them in 2012.
Daniel Schneider, an assistant professor at the University of California at Berkeley, is part of a team of researchers looking at the impact of work schedules on peoples' lives. In a nationwide survey of 11,000 workers in the retail and restaurant industries conducted through Facebook in the first half of 2018, they found that 59% wanted more hours — significantly more than the BLS' measure of involuntary part time work.
"This is not a story of how we have maxed out the hours that people can work," Schneider says. "Neither one of these data points says there's a massive change of a part-time workforce to a full-time one."
In recent years, several cities have passed laws aimed at making schedules more stable and predictable. Some of them give existing workers first dibs on new hours that become available.
In 2016, Washington D.C. passed a law requiring that building service employees must have access to a minimum of 30 hours a week as a result of advocacy by the powerful Service Employees International Union, which represents many of the city's janitors and security guards.
It made a difference for Leticia Reyes, a 54-year-old janitor who every weeknight cleans an office on K Street downtown. Before the law passed, she only worked 5 hours a day. Since that didn't meet the 30-hour threshold necessary for her to receive healthcare benefits, she relied on Medicaid.
Now, Reyes works 6-hour shifts, and has full health coverage sponsored by her employer. At $15.60 an hour, the extra hours allowed her to make enough money to stop doing odd jobs on the side and spend more time with her elderly mother.
"Before, I was feeling like I aged faster, because I had no money," Reyes said in Spanish, through a translator. "Now I can breathe."