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Retailers’ Outlook for Shopping Season Sales Depends on “Essential” or “Non-Essential” Status
Nearly half (47 percent) of retailers say they are having a tough time attracting employees for the upcoming holiday season. That is according to a new Korn Ferry (NYSE: KFY) survey of more than 50 major retailers.
“The need for talent varies greatly from retailer to retailer, with specialty stores such as clothing boutiques finding it difficult to compete against Big Box retailers that pay better,” said Korn Ferry retail expert Craig Rowley. “The effects of last spring’s shutdown due to the pandemic are still impacting many retailers, as they laid off employees who didn’t come back when stores re-opened. Hiring managers will need to be creative to attract seasonal workers.”
Nearly a third (29 percent) of retailers are offering incentives to new hires, such as bonuses, premium pay and increased employee discounts.
When considering the upcoming season, the level of optimism surrounding sales depends on the type of retailer. Nearly three-quarters (72 percent) of retailers that were deemed “essential” and allowed to stay open at the beginning of the pandemic expect an increase in sales this holiday season, with 29 percent expecting business to be up more than 10 percent.
However, “non-essential” retailers, such as specialty clothing and home décor shops, are not as optimistic, with half (44 percent) expecting a business decrease from the year prior, with 17 percent expecting sales will be down 10 percent or more. An anticipated slowdown in holiday sales for these retailers also means that nearly a third (31 percent) plan on hiring fewer holiday employees.
Changes in the business climate are also impacting pay programs, as nearly half (49 percent) of retailers say they are changing their store management incentive plan, with 34 saying they are changing the metrics by which managers are incentivized. Overall, 80 percent of retailers say they expect to offer merit increases in 2021, with 44 percent expecting the customary 3 percent merit increase.
About the survey
The Korn Ferry survey of more than 50 major U.S. retailers, with annual revenues between $50 million to more than $20 billion, took place in late September 2020.
About Korn Ferry
Korn Ferry is a global organizational consulting firm. We work with clients to design their organizational structures, roles and responsibilities. We help them hire the right people and advise them on how to reward, develop and motivate their workforce. And, we help professionals navigate and advance their careers.