Staffing shortages will continue to persist, and likely worsen in the near future, straining retailers’ ability to generate revenue during the ongoing COVID-19 pandemic.
“COVID of course turned everything upside down. Currently, most retailers when they came out of wave number three were under-staffed between 20 and 25 per cent. It’s hard to say what the recent lockdowns have triggered but I anticipate the shortages or the vacancy rate will linger at 20 and maybe get as high as 30 per cent,” said Sears.
“There’s a direct measurable correlation between the amount of staff and sales revenue. Retailers have known this for hundreds of years. Each person on the floor is expected to generate X number of dollars. Reducing staff on the floor does not off-set it. It simply means you’ve lost some sales. Now I think retailers are feeling very confident that people will flip to e-commerce if that’s the case but the minute you flip to e-commerce you’re competing with everybody else. The leakage, the ability to jump to a different retailer, is pretty high.
“So if you can capture a sale in a store that should always be your first choice . . . You’ve got to maintain a minimum store floor presence.”
She said many factors are driving that high vacancy rate in retail jobs.
The first, and most immediate one, is how the Omicron variant of the virus is affecting so many people because it is so infectious. It’s knocking retail staff out of commission and some of them are just sitting out the latest health crisis. They don’t want to risk getting the virus and they are waiting for the current situation to be resolved.
“If you’re working in front-line retail, you’re facing the public all the time. So there’s no end to your exposure and there’s no requirement that your co-workers be vaccinated. So it’s a high risk environment,” said Sears. “So this is why many are saying I think I’ll drop out for awhile.”
Another factor in the labour shortages is that people are re-thinking if retail is the right career for them on every level because it has a tremendous amount of volatility. Here today, gone tomorrow.
“The employers can pretty much blame themselves for that one because a good number of them did not offer the support throughout the entire pandemic. If closures came, they simply laid people off. People didn’t hear again from them until they wanted them back. But people then wonder when they close again what happens to them?,” said Sears. “So a lot of people are re-evaluating whether retail is a viable career.”
She said wages in every other sector have increased dramatically and wages in retail are rising a bit but at a “creeping” rate.
“It becomes a risk-reward issue. Would I prefer to go and load boxes at Amazon for $20 an hour, work in the warehouse at Algoma Steel for $25 an hour or work in retail at $17 an hour – that’s pretty much what retailers have been tossing around lately. That’s sort of the average,” said Sears.
“The risk-reward component is iffy. There’s not enough benefits. There’s not enough sick pay. There’s not enough flex. Again, employers are going to have to take a solid look at these issues plus the hours aren’t usually guaranteed. If I’m hired for full-time, next week I might be working part-time and part-time in some cases has dropped down to four hours a week.”
Another factor leading to labour shortages in the retail industry is retirements and people simply quitting their jobs.
“There’s a huge quit factor. In the United States, 20 million people quit their jobs in 2021. In Canada, we don’t know because we don’t really track it as much but if we cut the same percentages as being about 10 per cent of their population, it would mean approximately two million people quit their jobs,” said Sears. “So you ask yourself why would people do that during a pandemic? How bad are things that people would actually quit?
“But it is happening. The work/life balance has always been a problem in retail and retail has been slow to pick up the flexibility factor where people need far more time off or leaves of absences than ever before. And if they aren’t going to get them they simply quit.”
On top of everything, immigration to Canada has been really slow in the past two years.
“Because we don’t have population growth on our own, we look to a huge pool of immigrants coming into the country who often take retail jobs as their first jobs,” said Sears.
“I predict we could be looking at vacancy rates of 25 to 30 per cent midway in 2022.”