For the past two years, Amazon.com Inc., Wal-Mart Stores Inc., Target Corp. and other big retailers have been flinging up warehouses and distribution centers across the country to get their online orders to customers faster.
In the coming holiday sales season, that building spree could come back to bite them—and the companies that deliver their packages.
With the nation’s unemployment rate at a seven-year low as holiday hiring begins to pick up, some retailers and logistics contractors are already struggling to find enough seasonal workers to keep their new facilities humming. Soon, United Parcel Service Inc., FedEx Corp. and smaller regional delivery firms will be facing the same problem.
Employment agencies for retailers and logistics companies say they are having trouble finding warehouse workers to stock early holiday inventory and employees to train for work in fulfillment centers, where holiday orders will be packed and shipped.
Few could have predicted the nation’s unemployment rate would fall to 5.1%, as it did last month, amid such red-hot growth in e-commerce. As a result, retailers and delivery companies expect to have to raise starting pay in some places.
For last-minute cybershoppers, the labor shortage may make the coming holiday season even riskier than the previous two, when Amazon and other retailers gummed up the works by trying to ship too many packages in the final days before Christmas.
“Last year was the first year that companies felt some challenge [finding workers], and this year they’re feeling it even more,” said Craig Rowley, leader of the retail practice at Hay Group, a provider of human-resource services. “Between the low unemployment rate and, hopefully, a good Christmas, it’s going to be tough.”
The crunch has spurred some retailers to start holiday hiring earlier than usual. And they are trying to figure out how to be flexible enough to accommodate employees who can only work certain hours or shifts.
Starting warehouse wages, which have been stagnant for years, have been rising by about $1.50 to $3 an hour to attract workers in some markets, according to logistics staffing firm ProLogistix. The firm said that in this holiday season, temporary jobs—especially at e-commerce companies—start in a range of between about $11 and $13.50 an hour, up from between about $9 and $11, though it varies significantly by region.
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