Pay Is Rising for Seasonal Holiday Workers

By Steve Bates October 23, 2018
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​Faced with higher minimum wages and a shortage of seasonal workers, many U.S. employers are offering significantly more pay to secure help for the 2018 holiday crunch.

Snag, an online employment platform focusing on hourly work, found that pay for seasonal retail, restaurant and hospitality workers will increase by about one-third in late 2018 compared to the same period of 2017, to an average of $15.40 per hour. The raises will be highest in retail companies. The survey of 1,000 employers in the three industries found that 84 percent will need seasonal help in 2018, up from 77 percent in 2017.

"This is going to be the hottest holiday hiring season, maybe ever, for retail and restaurants and hospitality," said Fabio Rosati, chairman and CEO of Snag, who is based in Arlington, Va.

Minimum-wage laws being enacted in many states and localities—and the scarcity of skilled and willing workers—are the main drivers of the pay raises. However, it remains to be seen if the higher pay will be enough to entice enough people to apply for seasonal openings.

"The competition is fierce," said Chris Beckage, senior vice president, north region, of global recruiting and staffing company Acara, who is based in Buffalo N.Y.

"It's remarkable that, in many recent months, there were more retail job openings than hires," observed Andrew Flowers, an economist at the Indeed Hiring Lab, who is based near Boston. His team analyzes the global labor market.

Combined with the October 2018 announcement by Amazon that it was raising base pay for its full-time, part-time, temporary and seasonal workers to $15 an hour, the upward movement of pay for temporary workers nationwide could indicate a broader trend of rising wages.

The pay increases for seasonal workers "are definitely going to vary based on the job," said Ana Serafin Smith, senior director of media relations for the National Retail Federation and based in Dallas. Smith noted that the holiday season is "a huge time for crime" and that people with experience in loss prevention will be in particularly high demand and will be paid well.

She added that the Amazon announcement could have a ripple effect. "I have heard a few other retailers saying that they were going to do the same thing."

A Bevy of Benefits

Doug Hammond, zone president of recruiting firm Randstad US, who is based near Atlanta, said not all employers are simply throwing more money at seasonal hires. "What everyone's afraid of doing is increasing their labor cost without getting a return on investment." That means they're also focused on making it easier for seasonal workers to get to work and offering them enticements to stay on after the holidays.

In addition to more compensation, many employers are offering flexible schedules and the types of benefits that traditionally have been reserved for regular staff. More than three-fourths of employers surveyed by Snag said they will give temps perks such as retention bonuses, paid time off, child care assistance, tuition stipends, transportation help, store discounts, free lunches and even health insurance.

"We're seeing benefits that we've never seen before" for seasonal hires, Smith said.

Typically, a retention bonus is paid at the end of a seasonal assignment. Sometimes it's as much as a full week's pay. "You have to make it worthwhile to them," Beckage said.

Some employers are even relaxing their drug-screening efforts in order to fill positions, according to Acara research.

The search for end-of-year part-time help began in July for some employers.

"It's starting earlier every year," Flowers said.

UPS is planning to hire about 100,000 people for seasonal jobs in the final months of 2018, said Doug Paterson, talent acquisition director for the shipping giant, who is based in Atlanta.

He said that while compensation—which will vary by region—is important, the company's reputation is also a major lure to seasonal workers. About one-third of UPS seasonal hires return each year. And many of the company's seasonal workers later become regular employees. Paterson himself started as a UPS summer hire in Chicago.

"There's a brand out there" about working for UPS, he said. "There's definitely word-of-mouth."

Expanding the Search

In the quest to fill seasonal slots, some recruiters are doing old-fashioned candidate searching. Acara is sending company representatives to churches and community centers to find potential workers for clients. Beckage said these representatives are posting on bulletin boards and talking directly to people they meet to determine if they or family members are interested in seasonal work.

Not all the indicators are pointing up, however. Job board Indeed reported that U.S. seasonal job postings through mid-September 2018 were 21 percent below the same period in 2017. The drop was primarily in non-sales positions.

Flowers said the numbers could reflect the fact that a significant number of jobs being posted are for regular rather than seasonal work.

The scarcity of workers raises the question: Will the economy's growth be limited by a lack of staff?

Experts say that some full-time employees want extra shifts and that some gig economy workers can be attracted to temporary positions by good pay and schedules. Still, the onus is on recruiters. "People have options," Rosati said.

Higher pay for seasonal workers "could be an indication of a change of heart and compassion" by employers, he suggested. "But it's also a really good business decision."

Steve Bates is a freelance writer in the Washington, D.C., area.

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