Retail and hospitality firms more worried about labor shortage than supply chains

Backups at maritime ports and overstuffed warehouses have triggered sales delays in recent months, but a new survey shows that retail and hospitality executives are more worried about hiring enough employees than ironing out those supply chain wrinkles.

Employers’ concerns about labor shortages reach into every level of operations, with businesses nationwide citing a shortage of skilled labor with no quick solutions, while supply chain executives say a generation gap is constricting an already tight warehouse labor market. 

And even as those shortages pinch, major logistics employers are ramping up their annual hiring spree as they seek for enough workers to fulfill a flood of e-commerce orders driving by the winter holiday peak. Transport and logistics provider Geodis said last week it will hire some 5,000 seasonal workers across 20 of its campuses in the U.S. and Canada. And package delivery giant UPS Inc. today said it will hire more than 100,000 seasonal employees ahead of the holiday rush.

Published reports point out that the nation may not be seeing so much a shortage of labor as an imbalance. The theory goes that waves of baby boomers continue to retire, millions of Americans suffer from lingering covid conditions, pandemic policies restricted the flow of immigration that typically refills that leaking labor pool, and the remaining workers face such spiraling costs for housing and child care that they can’t afford to live near workplaces.

Against that backdrop, retail and hospitality companies said their greatest concern for the fall season was staffing and wage issues (50%), compared to supply chain (28%), global events and gas prices (15%), or loss prevention (5%), according to Multimedia Plus, a New York-based workforce training and communications firm that conducted a survey of 149 senior executives in August and September.

And in response to the question “In staffing up for the Holiday Season, what are your biggest challenges?”, executives said recruiting (65%) was far more important than onboarding new associates (14%) or scheduling (8%).

“After two years of adjusting to a new normal, retailers and hospitality executives are scaling for pent up demand. Getting enough trained staff in place is a major focus and is more important than other issues that we have seen in the past,” David Harouche, CEO & CTO of Multimedia Plus, said in a release.

Despite the challenges, companies were optimistic that they would eventually be able to fill the open positions. Asked about their major focus for the fourth quarter of 2022, they were already preparing for the new hires with new employee training (45%), task management (25%), employee chat (12%), and associate mobile apps (9%).

“While so much has changed over the past two years, companies understand that their ability to grow and attract new customers is in their staff. The better the talent and the better they are trained, the better the ability for the organization to do business,” Harouche said.