Retailers rejoice: It’s shaping up to be a stellar holiday shopping season.
According to the National Retail Federation, 2019 holiday sales may rise by as much as 4.2 percent over 2018, possibly reaching a total of $730.7 billion. Making the most of this revenue boom requires beefing up the sales-floor workforce, and the retail sector may need as many as 590,000 seasonal workers this winter.
There’s just one hitch: With US unemployment at a 50-year low, it has become that much more difficult for retailers to find the candidates they’ll need.
Making great seasonal hires is hard enough in the best of circumstances, as the tight timeline of the shopping season leaves little room for the kind of deep deliberation that accompanies hiring at other times of year. Organizations have to move even more quickly than usual to snap up great talent before their competitors do. With seasonal candidates in shorter supply, some companies are choosing to take well-intentioned shortcuts, scaling back on the vetting process to get more people in the doors and working in less time.
“The pressure of the season can fuel a strong sense of urgency among hiring managers to make quick decisions, often without taking a deeper dive into the background [of potential employees],” explains Yves Lermusi, CEO of reference-checking software company Checkster.
Skimping on the background screens may mean more fully staffed stores, but it can also have some very negative consequences that defeat the whole purpose of building a seasonal workforce.
A Higher Risk — and Harsher Cost — of Bad Fits
As a new report from Checkster points out, inventory shrinkage is estimated to cost US retailers more than $45 billion each year. While inventory shrinkage often signals theft, that threat isn’t necessary external. The 2014 “Global Retail Theft Barometer” report found that, in the US, retailers are more likely to have their goods stolen by employees than outsiders: 42 percent of inventory shrinkage among US retailers is caused by employees, compared to the 37 percent carried out by shoplifters.
Not all seasonal workers are thieves, of course, but Lermusi notes that “the seasonal worker hiring process is more at risk [of bad hires], as it is not as consistent as the ongoing process.” And even if a seasonal hire isn’t looking to steal, that doesn’t mean they’ll be a great employee. Inventory shrinkage isn’t the only risk of a bad holiday hire — and it may not even be the most costly risk.
“Poor hires can have a negative impact on your brand because of bad customer service and the lowering of overall morale in your organization,” Lermusi says. “These risks are more impactful but harder to measure in terms of financial impact.”
The quality of a company’s seasonal retail hires can make or break its holiday season. Great retail associates create great customer experiences, encouraging shoppers to spend more and spread the word about how well they were treated. Bad hires, however, can drive customers away. Word spreads quickly in the social media age, and one person’s story of a negative experience with a store may influence hundreds or even thousands of readers.
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Plus, the hire’s attitude can influence their team members. A hard worker with a positive mindset subtly encourages other associates to adopt similar behavior, but a hire who doesn’t pull their weight can quickly drag the whole team down.
“It is paramount for retailers to do everything they can to weed out potentially bad employees before the damage is done,” Lermusi says.
Digging Deep Without Losing Time
Many retail hiring managers look at a report like Checkster’s, shrug, and resign themselves to the risk. “It would be nice if we could vet more thoroughly, but I don’t really have time to add extra steps to the hiring process,” they think. “I need to staff my stores as quickly as possible. That’s the top priority.”
It’s an understandable mindset, but it’s not exactly an accurate outlook. As Lermusi says, “there are many tactics that can ensure a successful hire,” even when the stakes are high and time is short.
“The single most important action is screening,” according to Lermusi. “A company’s best defense against hiring fraudsters is through a complete background and reference check, and temporary seasonal positions are no exception.”
Organizations can dig into seasonal candidates’ backgrounds without slowing themselves down by opting for automated reference-checking solutions rather than checking references manually.
If adopting new software simply isn’t feasible, hiring managers still have options. Lermusi says that the same best practices for sourcing quality long-term hires apply to seasonal hiring. Start by asking your best employees for referrals and recruiting existing customers, as these are two talent pools with a higher chance of yielding trustworthy, qualified hires. Beyond that, Lermusi also recommends reaching out to retirees and conducting face-to-face or video interviews to get a better read on each potential hire.
The holiday shopping season may be a time of great stress and urgency for retailers, but that doesn’t mean the hiring process has to suffer.