Q4 Peak Season: If You Haven’t Starting Hiring, You’re Now Behind By Hire Dynamics CATEGORY: Blog POSTED: September 16, 2021 And when we say “behind,” we mean “really behind.” As in, “you’ll more than likely face greater challenges in Q4.” In fact, the chances are great that you will also be scrambling and highly stressed. We’re not here to scare you… …but you seriously need to hustle and lock in the extra employees your e-commerce, distribution, or supply chain business will need to meet this holiday season’s workforce demands. Because your competitors already are An August 16 article in The Wall Street Journal mentioned how the grocery chain Aldi plans to hire 20,000 workers to deal with its U.S. expansion plans and the upcoming season. And they may find it difficult because it’s been difficult to find workers all summer and we don’t expect it to get much easier through the end of this year. Two factors are at play here As we mentioned in our July Jobs Report at a Glance, the U.S. Bureau of Labor Statistics’ July jobs report showed that the early termination of enhanced employment benefits in June and July did not increase labor force participation by workers. Workers, in other words, are still staying home, unemployment benefits or not. As a result, there are more job openings in the U.S. than there are people looking for work. You understandably may be asking, “If I’m behind because I haven’t started recruiting for 4th quarter, how in the world am I going to hire these people who aren’t even in the job market?” EXCELLENT question! Here’s the #1 Strategy that’s Impacting Recruiting Raise pay rates. Considerably. We’ve found that in the Southeast, where Hire Dynamics predominately serves customers, the only way to get people to take on your typical e-commerce/warehouse/distribution/supply chain positions is to pay them a higher hourly wage. How much higher? Could be two to three dollars/hour more. For example, clients paying below $15/hour for entry-level distribution are struggling to fill positions, whereas clients paying $15/hour or greater are seeing more success in achieving their hiring goals. Will this be short-lived? Probably, but it depends on your definition of short-lived. As we mentioned in a short report we published in July regarding e-commerce/fulfillment centers, etc., we believe a new pay rate floor has been set. Additionally, we will continue to see wage inflation in the short term until the supply of talent realigns with demand. “I simply can’t afford that. What about perks, incentives, and benefits?” Unfortunately, we’re finding that perks such as free lunches, prize raffles, etc., might get people to stay with you, but it will not get them in the door. Look at them, therefore, as talent retention strategies. Bottom line: In this current market, if you want workers, you MUST pay them more, and the perks and fun will help keep them there. A financial incentive that helps talent get to work every day (and could help you save money) Attendance is a big deal for e-commerce/distribution centers: if folks don’t come to work, you’re short-staffed, and you can’t get as many products packed and shipped, returned/sorted and reshelved, etc. If you can’t ship as many products as your projections expect, you lose money. If you can’t restock as many returns as you’d like, you lose money because you can’t resell them. Thousands if not millions of dollars of revenue could be lost due to poor attendance. Which is why financial incentives for perfect attendance is working for our clients (with a caveat) For example, you could pay $15/hour for pickers/packers to start and offer a $2/hour incentive for perfect attendance each week. We are, however, finding that while this is effective, it does not move the needle as much as higher base pay. Additionally, we’ve seen success with companies offering a flat $100-200 a week for perfect attendance. (The lower salary with an increase for perfect attendance does work, but not as well as higher base pay. Keep that in the back of your mind as you plan your hiring strategy.) Advertising your high pay rate is critical We can’t emphasize this enough: no more hiding your pay rate until the interview; it should dominate your job ad. If you’re going to go the raise-in-pay-for-perfect-attendance route, you need to highlight that in the ad: “Start at $15/hour with real potential to get to $17/hour each week!” If you pay $24/hour for forklift drivers, boldface it in your ad. It’s not too late to start hiring for Q4…with our help If we caught your attention at the beginning of this post and you realize you’re – to put it frankly – now behind the eight ball, don’t panic: Hire Dynamics can help. In a significant, positive way. We constantly recruit, vet, and place talent in the e-commerce/distribution/retail warehouse/supply chain sector. By leveraging the millions of dollars we spend each year on our sourcing and recruiting strategies while utili zing our 20+ years of experience in this industry, we can save you money, alleviate stress and –most importantly – help ensure that you have the workforce you need for a successful Q4. Learn more about how we can quickly help you ramp up your holiday workforce.
