Seasonal workers: The supply chain’s missing link

The holidays seem to creep around the corner faster every year. Usually at this time, stores begin their seasonal hiring efforts as shopping ramps up ahead of the ‘giving season’. However, this year, many brands are changing their strategy. Several big-box retailers, including Walmart and Macy’s, have announced plans to slow holiday hiring efforts to protect their bottom lines as inflation continues to rise amid economic uncertainty.

While the move is mainly to cut costs, it could have detrimental effects on operations, customer loyalty, and most critically, employee satisfaction and retention. Leading businesses will ensure they’re equipped to manage sudden shifts in demand this season without added stress and burnout for frontline workers.

Big-box stores announce staffing cuts

Walmart has announced plans to hire 110,000 fewer seasonal workers than usual, while Dick’s Sporting Goods has reported a 10% cut to seasonal positions. These cuts reduce the seasonal workforce significantly, as nearly 665,000 people worked seasonal retail positions in 2021. Though there are fewer positions to fill this year, the unemployment rate is still near July’s all-time low of 3.5%. Even with fewer positions open, will retailers be able to fill them all – and will it be enough?

This uncertainty presents incredible risk. In 2020, fear of COVID-19, social distancing measures, business closures and unemployment resulted in less consumer demand for many goods and services. When spending unexpectedly rebounded in the third quarter of 2020, many retailers were unable to meet demand due to dwindling inventory, shipping delays, supplier disruption and a smaller workforce.

Now, we’re seeing another sudden change in consumer demand. According to KPMG’s 2022 Holiday shopping report, 85% of shoppers are concerned about inflation’s impact on their shopping plans this year. U.S. shippers are seeing a 20% drop in ocean freight orders – forcing carriers to cancel as much as 50% of sailings to rebalance vessel capacity to demand. However, should demand remain strong, a too-small seasonal workforce could be the latest blow to the supply chain – and the final straw for many hourly workers.

The risk of a smaller frontline workforce

The largest retailers have incredibly complex supply chains that have been struggling for years. Between longstanding turnover issues, the Great Resignation, recent dock and rail worker contract negotiations and more, brands are struggling to hire and retain workers to create and transport consumer products.

Now, with plans to employ fewer folks ahead of the busiest season, brands could be driving more workers away with less employees than ever. Consumers could face major product shortages and delays, while big-box retailers struggle with employee burnout that leads to more quitting.

Current workers who were employed prior to the holiday season will be some of the most impacted by seasonal hiring cuts. Hourly workers in supply chain roles – such as truck drivers, warehouse workers, etc. – have historically struggled with tough working conditions, harsh schedules and poor pay. If companies expect them to ‘do more with less,’ the impact on satisfaction, stress and burnout could be detrimental. To prepare for a holiday season with less workers to do the same amount of work, businesses need to have a strategy for retention and employee wellness.

Prioritizing your workforce ahead of busy season

Luckily, there are simple steps companies can take to ensure worker satisfaction and prevent turnover. However, most brands aren’t even doing the bare minimum. A recent WorkStep study finds that only 41% of hourly supply chain workers have been asked to provide feedback to management. Of those 41%, 70% feel their voices aren’t actually being heard.

Without truly listening to feedback to understand workers’ experiences – and to drive the right changes – businesses are in the dark on the earliest signs of dissatisfaction and turnover. This holiday season, it will be more critical than ever to continuously check-in with workers and assess pain points, challenges and stress levels. This could look like a bi-weekly manager meeting, a series of anonymous surveys, or conversations/reviews at important career milestones.

The key roadblock for many companies when it comes to this is scale. Large retailers like Amazon or Target have massive supply chains with hundreds of thousands of frontline workers. How can management be responsible for evaluating employee sentiment across thousands of workers – some of which are working on the road, constantly on the go, or have overnight shifts?

Related: What do seasonal workers want from employers? New survey offers answers

There is technology to help. The right engagement and retention solution can enable even the largest businesses to understand their workforce on a new level. Easy-to-use apps allow management to roll out anonymous check-ins that workers can take right from their phone. Notifications can alert managers when employees need an intervention, when someone is likely to leave, and what key turnover drivers are. From there, management can drive change that improves the employee experience, reduces turnover and ultimately improves the bottom line.

Take action to prevent turnover

Taking care of your business starts with taking care of your people. If your business is slowing down its usual season hiring push, it’s critical to ensure your employees can handle workload amid shifts in holiday demand.

To stay in the know, real-time employee feedback is key. It can equip businesses to proactively address issues before they lead to record quit rates during the busiest season of the year. As a result, employees and customers will be happier – and your brand will be on its way to a successful new year.

Dan Johnston is the co-founder and CEO of WorkStep.