Organizations have been used to years of a steady stream of people eager to pick up part-time work around the end of the year. But with the holiday shopping season soon to start, a slew of new data shows it’s going to be far harder to entice people with part-time gigs this year.
The economy grew for the 113th consecutive month in September, according to a new report recently, and the unemployment rate is down to 3.7% its lowest level since 1969. The number of open jobs still outnumbers the workers available to fill them. At the same time, the minimum wage increase and skills gap issues that exist in industries like retail and manufacturing means organizations are focusing on hiring and training permanent talent. These factors have combined to drive part-time unemployment to a 12-year low. The number of involuntary part-time workers last month totaled 4.4 million, or 2.7% of the overall workforce, the lowest rate since 2016.
“Manufacturing executives and talent are exercising greater selectivity of roles,” says Ron Malachuck, a principal in Korn Ferry’s Global Industrial Market practice. “The changing workforce and the current manufacturing skills gap places a greater emphasis on recruiting, developing, and retaining talent.”
The same is true in retail, which, like manufacturing, staffs up on seasonal workers to help with the increased sales volume over the holidays. According to a new Korn Ferry report, roughly a quarter of retailers won’t be able to hire all the temporary workers they plan to this year. The hot jobs market isn’t the only reason, however. As e-commerce accounts for a larger and larger share of revenue, retailers are cutting back on hourly or part-time employees. According to Craig Rowley, a senior client partner and global practice leader for the Consumer sector at Korn Ferry, retailers typically spend between 5% and 12% of their budget on hourly employees at the store level. The more people shop online, the more they bring down the amount allocated for hourly or part-time jobs per store.
To compensate, retailers at the store level have been converting part-time workers to full-time or asking them to work more hours. Rowley says there are trade-offs that work to the benefit of both the organization and the employee. The turnover rate is lower for full-time workers than for part-time workers, for instance, thereby reducing the cost of recruiting. They are also exposed to more training, which is shown to result in better customer service. Workers can be eligible for health insurance coverage, 401(k) plans, and other benefits that could lead to higher engagement and motivation, as well.