Perks are aplenty as restaurants and retailers struggle to staff up for the seasonal rush. / Bloomberg Perks are aplenty as restaurants and retailers struggle to staff up for the seasonal rush. / Bloomberg

U.S. Restaurants and Retail Battle for Labor Before Holiday Crunch

The labor crunch is only going to get worse as Thanksgiving and Christmas loom, and restaurants and retailers across the U.S. are tossing out perks to fill their workforce holes before the holiday rush.

In the Washington D.C. area, cooks at Clyde’s Restaurant Group eateries can now clock out, grab a seat at the bar and get a 25-percent discount on oysters and wine. The company added the perk this year to draw and retain staff.

“It’s helping because it’s a fight for employees out there,” Chief Operating Officer John McDonnell says. The company, which employs about 2,000, was still looking last month for more than 100 hourly workers—mostly servers at its full-service restaurants. With the holidays coming, “you just need to ramp up, you need more people,” he says.

Fast-food chains are also trying to staff up. A Wendy’s Co. restaurant in New Hampshire is offering $1,000 hiring bonuses, and Dunkin’ Brands Group Inc. says finding employees is becoming even more competitive for franchisees as other companies add staff to carry them through the busy last two months of the year.

“Everybody is fighting for talent.”

Labor is “something that weighs on our minds,” says Dunkin’ Brands Chief Executive Officer David Hoffmann. “As we get into the holiday season it’s just going to get exaggerated because everybody is fighting for talent.”

In October, Wendy’s franchisee Hamra Enterprises began advertising $1,000 bonuses to lure hourly workers at a location in Portsmouth, New Hampshire, that’s within walking distance of a Home Depot, Bed Bath & Beyond and more eateries. While it’s helping, the store still needs 12 to 15 more people, says regional director of operations Trent Colford Sr.

“It’s just the situation” and it may worsen as area employers ramp up recruiting efforts, he says. “There are more jobs available than the people to work them.”

Companies are on track to hire the most workers ever for the holidays, according to Challenger, Gray & Christmas Inc. In a Nov. 1 report, the consulting firm says U.S. companies are seeking to fill 714,000 jobs, topping the previous record set in 2014. Inc. is making it difficult for retailers with stores close to Amazon fulfillment centers, since the e-commerce giant is looking to hire more than 100,000 seasonal employees and will pay $15 an hour. Within 48 hours of the announcement, the company says it got 70,000 applications.

With the unemployment rate at a 48-year low, the staffing battle may escalate into all-out war. Retailers this year anticipate paying seasonal workers an average of $13.70 an hour, a 54 percent jump from expected pay of $8.90 last year, according to Snag, an online company that connects hourly workers with jobs in retail and restaurants.“This is an incredibly challenging holiday season—perhaps the hardest holiday season in decades,” says Fabio Rosati, chief executive officer of Snag. “Unemployment is low, companies like Amazon are hiring in direct competition with traditional retailers, and there’s also the gig economy.”

That labor market is based on freelance and short-term contracts. The emergence of ride-hailing companies Uber and Lyft has let job seekers work on their own schedules when they’re free. So, as retail and restaurant candidates become more selective, employers are testing new incentives, including gift cards, cash bonuses and even Florida vacations.

Target Corp. is hiring 120,000 for the holidays, 20 percent more than last year, and bumped the hourly wage to $12, up a dollar from 2017. The company is holding drawings for $500 gift cards. At Kohl’s Corp., employees get a 35 percent discount during a select few days during the  holidays, up from the regular 15-percent, though the company offers 35 percent discounts periodically during the year as well.

At the other end of the spectrum is Walmart Inc., which isn’t throwing out more perks to employees during the holidays. Despite the extremely tight labor market, workers will receive exactly the same offer of the past two years when they leave their Thanksgiving tables to work: a free dinner and 25 percent off one basket of items to take home.

Macy’s Inc., which is hiring 80,000 workers for the holidays, started a bonus plan this year. Full-time, part-time and seasonal employees can earn extra cash each quarter based on performance at the retail giant.

At J.C. Penney Corp, eight employees will be randomly picked to choose prize packages that include free trips to New York, Miami or Banff, Canada. Hourly and seasonal workers who stay with company through Dec. 29 are eligible. The retailer, which planned to hire more than 39,000 seasonal staff,  says it’s offering the rewards “to attract and retain associates” during the holidays.

Incentives aside, a prolonged dearth in staffing beyond the holidays could weigh on the economy, says Andrew Challenger, vice president of Challenger, Gray & Christmas.

“Employers are trying to attract and fight for people in any way they can,” he says. “We might see a slowdown in growth at some point if companies can’t get enough workers in the door.”

©2018 Bloomberg L.P.

This article was written by Leslie Patton and Hema Parmar from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to [email protected].

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