With retail employment down by more than 250,000 since last year and the holiday season rapidly approaching, retailers are preparing for a labor shortage that will negatively impact in-store and online customer shopping experiences.
According to Challenger, Gray & Christmas, retailers are expected to add 700,000 workers during the 2021 holiday season. While this number is down from 2020, retailers will still find themselves struggling to fill these positions. Facing supply chain issues, the rising cost of goods, and a challenging labor market — resulting in increased wages and enhanced benefits that include signing bonuses, tuition assistance, etc. — no company can afford operational deficiencies due to a bad hire this season.
On average, the time-to-hire across all industries is three to four weeks. However, with the short holiday shopping season (which is only between 25 and 31 days each year), this year’s retail hiring process will be condensed and intense to fill vacant positions — both seasonal and permanent. There is also a high-level concern the holiday shopping season will start earlier than usual because of pandemic-related supply chain issues that will affect brick-and-mortar and e-commerce shops. Companies are already feeling the crunch to hire; Many employers are setting up hiring events that offer faster than average hiring timelines — even offering applicants jobs the same day they apply.
To remain competitive and secure interested, qualified applicants, fulfillment centers and retailers may try to hire and onboard seasonal workers faster than usual by skimping on background checks. This makes it easier for a bad elf to enter the workshop — resulting in costly risks for companies.
Organizations can reduce risks and, ultimately, costs associated with a bad hire by improving pre-employment and offboarding processes. Here are three key processes that can ensure companies hire from the nice (not naughty) list.
1. Background Screenings
Insider theft is one of the most common operational risks during the holiday season. In fact, $32 million in cash and stolen goods were recovered from more than 26,000 dishonest employees in 2020, according to an international loss prevention/shrinkage control consultant. In addition to stealing from Santa’s workshop, a bad hire can result in a toxic company culture during the most wonderful time of the year.
According to the Department of Labor, a bad hire can cost a company more than 30% of the employee’s earnings. As the cost per hire continues to rise and turnover continues to be high, it’s imperative employers hire the right people the first time around since there isn’t the time (or money) to waste on replacing bad hires.
Comprehensive background checks, including criminal records and credit reports, are an integral piece to any successful pre-employment strategy. Employers can make educated hiring decisions by knowing a candidate’s criminal history and may not automatically disqualify an applicant from filling a position. Most comprehensive background checks can be completed in less than 48 hours, so retailers can staff up quickly while still offering timely responses to candidates.
2. Drug Screenings
Retail employers must continue addressing the health, safety, and wellness risks associated with substance abuse. Lost productivity resulting from a substance abuse disorder costs employers $25.5 billion overall annually and employees with multiple addictions can cost employers $16,000 – $21,000 annually, almost three times more than those with no underlying drug or alcohol issues, according to Quit Genius.
One of the best ways to determine if an applicant is struggling with a substance abuse issue is to conduct pre-employment drug testing, then continue routine testing per the organization’s drug-free workplace plan. Instant or rapid drug tests provide accurate results in minutes at the point of collection and are more private and convenient for applicants or employees.
By choosing a drug screening provider that has earned a Consortium/Third-Party Administrator accreditation, organizations can work with the provider to determine which type of drug testing method is best for them.
3. Cybersecurity Risks
As technology continues to evolve so do the operational risks companies face. The latest research from Adobe Digital Insights shows holiday e-commerce will hit a record $107 billion this year. If employees are using their corporate emails or passwords for seasonal shopping it puts the company at an increased risk for potential cyber breaches and phishing scams.
Beyond phishing attempts of current employees, offboarding seasonal hires from all company applications, networks, and devices they’ve used without properly securing data can leave systems vulnerable. If not securely offboarded, former seasonal employees can still access company systems and internal data. Large retailers who hire hundreds of thousands of seasonal workers in a short amount of time may have difficulty keeping track of minimum access rights and security privileges — and only 15% of organizations are confident in their access control program.
Having a comprehensive onboarding and offboarding process helps companies ensure they are seizing top talent this holiday season and reducing costly risks afterward. As the supply and labor shortage is predicted to stretch past the holiday season into next year, streamlining hiring processes will ensure retailers are able to be competitive if the coronavirus continues to change traditional business operation models.
Your workplace has changed forever. So should your hiring expectations.
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*A version of this article originally appeared in InBusiness Magazine.
RJ Frasca is Vice President of Marketing and Product of EBI Inc., a leading background screening provider. Frasca brings more than 20 years of marketing and product experience with companies such as Yahoo, Microsoft, Time Warner, and Verizon.