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What You Need To Know About The State Of The Retail Worker Shortage

By Rob Press • 3 Oct 2022

Retail workers are at the heart of the economy, making the continued retail labor shortage a top challenge for retailers–one that appears here to stay.

Some headlines provide hope, with statistics showing improvement, while others give mixed messages.

For example, according to a recent PwC survey, acquiring and maintaining talent is one of the top two risks for business executives. Yet 50% of these same executives are reducing headcount.

Get the real story on today’s retail worker shortage, as we break down:

The Current State of the Retail Worker Shortage: Are Retail Workers in Demand?

The worker shortage exists on an odd see-saw that swings between labor shortages and the effects of Covid-era over-hiring.

With reports of retail layoffs and overstaffing at companies (such as Walmart and Amazon) to cover Omicron-related staffing shortages, it would appear the shortage of workers may be abating.

Yet according to retail advisory firm IHL, “The most significant challenges to inventory distortion are the availability of workers and the disruptions outside of the immediate control of the retailer.”

Overall, the situation is fraught with uncertainty, and the worker shortage is a major concern to retailers–particularly with the increased demand for associates during the holiday season.

Retail Labor Shortage Statistics – The Numbers Behind the Headlines

As per a recent report by CNBC, the labor department in the United States has 5.5 million more job vacancies in retail than the workforce available to fill those jobs.

The risks surrounding the retail labor shortage aren’t new.

In October 2021, Brian Olsavky, CFO of Amazon, claimed that the company would require 150,000 extra workers to cater to the heightened customer demands during the holiday season.


And now, almost a year later, retailers are still concerned about filling positions.

According to NRF, employers across industries are struggling to find and retain workers, with the national labor force participation rate still 1.3% below its February 2020 rate, despite enticements like improved workplace flexibility, benefits, and wages.

The article states that “presently, there are nearly two open jobs for every unemployed worker.”

Additional statistics further illustrate the continued prevalence of the global retail labor shortage.

  • Looking back to November of 2021, the US Bureau of Labor Statistics stated that 686,000 people resigned from employment in the retail industry.
  • Forecasts by Korn Ferry cited that by 2030, more than 85 million jobs might go unfilled as there won’t be enough skilled people to fill them.
  • Deloitte estimated that at least 1 million more retail laborers are required, in addition to the 15.7 million existing employees, for the industry to thrive.
  • The UK hit a record high of 1.3 million job vacancies, with the retail and hospitality sectors showing the highest need for workers.
  • Leaked internal research reveals Amazon is at risk to run out of workers for its US warehouses by 2024.
  • Within the UK’s retail and wholesale industry, Indeed listed jobs for 6,734 product managers and 5,397 sales assistants.
  • Facing more than 40,000 job vacancies in retail, the Australian Retailers Association has proposed a national framework allowing teens as young as 13 to work and fill gaps in the country’s labor shortage.
  • France saw its unemployment rate reach 7.3% in 2022, with Finance Minister Bruno Le Maire calling the shortage the country’s “second biggest emergency.”

A Mixed Message: Hiring Halts and Reductions Despite Continued Shortages

Despite the need for retail staff, the hiring spree to meet the surging demand for retail workers did suffer a pullback.

And as recession skirts the edges of budget plans, more companies are rethinking their hiring strategies. Retailers are no exception.

Facing an economic downturn, we’ve seen retail layoffs at a number of major players in the industry, including Allbirds, Bed Bath & Beyond, PVH Corp., Shopify, ThredUp, and Walmart.

Looking at the hiring landscape, it is evident that the retail sector has been exposed to unprecedented challenges, which have further worsened since the pandemic

Covid has provided the opportunity and the space to consider alternate avenues of income, preferably ones that have more scope for career growth.

But the Labor Shortage Remains a Top Retailer Challenge

Despite some improvements, a shortage of skilled workers remains a challenge across both frontline workers and executive offices.

Where Are All the Retail Workers?

The demand for retail workers to fill positions in stores, warehouses, and the manufacturing plants of vertically integrated retailers is not decreasing anytime soon.

As explained by McKinsey, “No other US industry is more affected by the ‘Great Attrition’ than retail, simply because it employs more people than any other sector in the US economy.”

From the United States to Europe, it’s a worldwide challenge for retailers.

Consider that:

  • In the United States, in February 2022, the part-time labor shortage increased by 13 percent in a month. In addition, almost half of frontline retail workers are thinking about quitting their jobs, and 63% of frontline retail managers are considering quitting in the near future.
  • In the UK, 12% of wholesale and retail businesses are facing staffing challenges.
  • In Australia, the country has more jobs than job seekers for the first time ever, while a “blowout in visa processing times” has over a million potential workers waiting in limbo.  Australian Retailer Association CEO Paul Zahra has stated, “We’re at a crisis point when it comes to labor shortages.”

Some retail industries which require specific skills and experience, like the luxury industry, have been facing a shortage of in-store workers who can feel the pulse of high-profile Gen-Z clients as well as old-school veterans.

Moreover, the new policy of purchasing online and picking up in-store adds to the already high-stress environment for in-store employees. When customers arrive curbside to collect their purchase, they have no intention of waiting.

The Importance of Finding Frontline Retail Staff for Peak Holiday Season

When looking to the holidays, retailers who want to maximize peak season profit opportunities need frontline workers more than ever.

Last-minute gift givers depend on in-store shopping for last-minute purchases. Others do their holiday shopping in-person to ensure they are picking a present with quality that shows they care.

And those extra shoppers signal a need for more associates, not only due to extended shopping hours, but to keep lines to a minimum. Those who don’t have enough staff risk losing profits at the finish line: According to original research by IHL and ToolsGroup, 14.5% of people leave stores without buying what they intended to purchase simply because the line was too long.


RELATED: Get the full consumer research report – How Retailers Win Customer Loyalty in an Omnichannel World


Retailers looking for extra holiday staff also face another risk: The growing trend of “quiet quitting.”

According to Forbes, retailers planned to hire 500,000 to 665,000 seasonal employees in 2021. However, waning employee loyalty in the retail sector may widen the workforce gaps and make filling positions–even seasonal ones–with enthusiastic employees more of a struggle.

The Need for Corporate Retail Talent

When discussing the retail labor shortage, many focus on retail associates interacting with customers, or other frontline workers in manufacturing, warehouses, and distribution.

But with a shortage of skilled workers in office jobs as well, retailers are also in need of white-collar workers. In addition to existing hiring plans, employee retention could prove to be a problem, with a global PwC study revealing 1 in 5 employees are likely to quit in 2022.

In the wake of the Great Resignation, retail executives are taking action to retain corporate employees.

For instance, Target offered its workers the opportunity to work in a hybrid model where employees could determine when they would need to be in the office and when they would rather work from forecasthome.

Retailers who need to fill corporate positions face the same challenges they face when looking for store associates: There’s not enough workers. Applications for white-collar jobs have reached a “breaking point,” falling 35% between May and June of 2022.

Sourcing staff with the skills needed for a digitally-transformed economy also proves difficult–particularly when data analytics are essential to unlocking business growth.

Data-driven decision gives retailers increased efficiency, minimized waste, and the ability to spot opportunities to increase profits and customer loyalty. But the data science abilities needed by corporate brands often aren’t taught in college, making it even harder to find staff with these skills.

According to Upwork’s 2022 Future Workforce Report, data science and analytics roles are the hardest to fill, as cited by 60% of hiring managers.

How to Make Data-Driven Retail Decisions–Without Hiring Data Scientists

Workers with a PhD in data analytics may be hard to come by, but retailers can still make decisions with more efficiency–and accuracy–thanks to retail planning tools powered by AI and machine learning.

Get better results in less time thanks to software that easily integrates with your existing ERP, giving you advanced data-driven decision making for more accurate demand forecasts, optimized inventory, customer-centric assortment plans, and automated replenishment.

Show Me How to Boost Profits →


Effects of the Labor Shortage on Corporate Workers

A shortage of workers means even retail executives are facing long hours, high-stress, and endless to-do lists.

But there’s another–surprising–result from the shortage of store associates.

To optimize labor costs, retail enterprises are asking their corporate workforce to multi-task, managing the store as well as the system operations.

Macy’s, for instance, has been urging its corporate employees to work in-store during holiday sales, when customer traffic is at an all-time high.

As per the memo, “Experience Elevation Elves,” Macy’s asked its corporate employees to opt to work in-store for three days, 9-to-5 shifts, at a time when the company wanted to fill 76,000 vacancies in its stores.

Online grocery store Hy-Vee announced in 2022 that it would shift 500 of its corporate workforce to in-store jobs, to minimize expenses.

Wondering how to attract and retain a strong workforce?

Learn how you can secure good talent and help your employees thrive while delivering better business outcomes.

Check out 4 Concrete Tactics to Combat Employee Turnover and Source Staff →

Why Is There a Shortage of Retail Workers?

Three main factors play a role in the ongoing hiring difficulties.

  • Instability: Unpredictable scheduling is a frustrating part of a retail job. But improved retail employee scheduling can make all the difference. In 2018, a test by popular clothing brand, Gap, reported that with a stable schedule, employees were more productive within eight months.
  • Lack of Growth Opportunities:  Due to the labor shortage, store associates have had to face long hours and unpredictable shifts. Aside from trying to beat the burnout, many frontline workers find themselves with a lack of upskilling opportunities. In addition, there’s a limit on how many managers any store needs, meaning career advancement can feel challenging.
  • Benefits and Wages: Often, retail wages aren’t associated with high pay,  with the mean hourly wage for a retail salesperson in the U.S. at approximately $15. A lack of health insurance and pension facilities reduces the appeal to consider it a long-term career opportunity.


How to Hire in a Labor Shortage: Attract More Retail Staff and Meet Customer Expectations

Meeting consumer expectations depends on retail team members who work in-person.

From behind-the-scenes operations and dispatching shipments to stocking shelves and interacting with customers, the shopping experience depends on work that can’t be done remotely.

And with customer loyalty levels on the decline, the need to source these frontline retail workers is more imperative than ever to business success.

Heading into peak holiday shopping season, here’s how companies can attract and grow a strong employee base.

  • Competitive Pay: Better pay tops the list, especially as inflation sends prices upwards. Research has shown boosting pay helps create motivated employees and retain longer work relationships. Plus, one report showed that for every $1 pay increase, a store could see a $4-28 bump in monthly sales.
  • Improved Communication: Setting articulate expectations with stable schedules and better management can be a hiring differentiator.
  • Flexibility: With the pandemic making irreversible changes in our lives, most employees expect some degree of flexibility from their employers.
  • Incentives: Adding time-based bonuses can be pragmatic. Retailers across industries like Walmart, Walgreens, and Krogers, as well as health-based pharmaceuticals like CVS Health and RiteAid, are revamping their bonuses to account for more benchmarks like time and productivity.
  • Training and Education: Much of today’s workforce is looking for ways to increase their skill sets. Offering reskill and upskill opportunities are a great way to attract and retain talent. In fact, 74% of employees at companies who offer no such opportunities would prefer to work at companies that do.
  • Enhanced Benefits: Reassess your employee benefits package. Understand what’s important to job seekers and consider revising and improving your insurance offerings, employee discounts, or PTO, sick leave, and maternity leave policies.
  • Technology: Equip your team with the tools they need to do their jobs efficiently and improve workflows. This means investing in the automated solutions that eliminate grunt work, streamline processes, and provide visibility for improved productivity.

Overcoming Retail Labor Shortages with Technology

When looking for ways to solve the retail worker shortage, one of the top tactics companies are turning towards is technology and automation.

Here are some of the myriad ways technologies are meeting the challenges of the worker shortage.

  • Robotic Process Automation: Many industries, including manufacturing, financial services, healthcare, insurance, logistics, and utilities, are establishing a place for RPA (Robotic Process Automation). RPA is thought to be applicable to 60% of tasks in manufacturing, 43% of tasks in banking, financial services, and insurance processing, and 36% of tasks in healthcare and social services.
  • Self Checkout: Post-pandemic, the prevalence of self checkouts has nearly doubled. Self checkout transactions represented 30% of all grocery store transactions in 2021.
  • AI: AI helps retailers make more accurate predictions for the future, minimizing the amount of time and talent needed to fix inventory issues from inaccurate demand planning.
  • Automated Retail Solutions: When it comes to recruiting talent to work in the head office, automated retail solutions, such as allocation and replenishment help workers and planners manage in-store stock efficiently and spare them the drudgery of manual spreadsheets. This allows staff to increase their efficiency and improve the impact of their analyses.
  • Recruiting Tools: Businesses can combat labor shortages by investing in mobile hiring apps. These cutting-edge apps keep candidate data, speed up the onboarding process for new hires, and even enable current workers to recommend job candidates to one another.


Technology is a powerful tool when it comes to streamlining processes and efficiently planning your supply chain, reducing your risk of turnover and increasing employee satisfaction.

Learn How Automation Elevates the Role of the Planner and give your employees opportunities to expand their skill sets.

Grab My FREE Guide to Winning Shopper Experiences →


Creating the Optimal In-Store Experience for Employees and Customers

As more companies continue to boost wages to stay competitive, authentic care for every associate is the best way to attract high-quality talent. In turn, the care you show employees builds morale and job satisfaction, resulting in a better customer experience and increased customer loyalty.

It’s also important to remember that retail runs on inventory. Optimized inventory means customers are less likely to turn to store associates for help when products are out-of-stock, increasing satisfaction for customers and retail workers alike.  Real time inventory visibility provides the same benefits, giving shoppers and staff the ability to see exactly what stock is available in-store.

Find out how you can leverage inventory to create the optimal experience for everyone at your store, and stay up to date on the latest retail-related risks and opportunities.

Check out the State of Retail Inventory and discover nine actionable tactics for overcoming inventory disruptions.

Grab My FREE Guide to Winning Shopper Experiences →

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