Why Retailers Are Turning to Supplemental Workforces
Despite a disappointing Black Friday, last year’s holiday shopping season wasn’t all bad news. In fact, staffing and recruitment solutions provider Corporate Resource Services, Inc., (CRS) says the season was “more boom than bust” overall. Reports from the National Retail Federation suggest that CRS is correct: holiday sales rose 4 percent in 2014 to $616.1 billion.
Alongside rising sales, CRS saw a a 20 percent year-over-year increase in the seasonal demand for workers in retail and logistics.
Mark Levine, president and COO of CRS, says the growth of ecommerce is partly responsible for increased demand for seasonal workers. Online sales grew 6.8 percent last year to $101.9 billion.
“That’s a huge statistic,” Levine says. “As that increases, so will the need for a supplemental workforce for our clients in both the retail and the logistics sectors.”
When major ecommerce retailers see their business grow, it affects not only their staffing needs, but also the staffing needs of every company involved in the chain, from the makers of the product to the parcel service delivering the product.
Levine and CRS CEO and chairman of the board John Messina both believe demand for holiday seasonal workers will continue to grow. They also believe that, going forward, we’ll see supplemental workforces play a larger role in the retail business throughout the entire year.
“We’re seeing a lot more of these major retailers utilize a supplemental workforce that expands and contracts based on their customer demands,” Levine says. “[The trend of retailers using supplemental workers] is something that will stick around for a while.”
Messina and Levine say that supplemental workforces have grown more attractive to retailers because they offer a way for companies to more easily navigate the complex rules and regulations of employment law. For example, when the Affordable Care Act was passed, many retailers turned to organizations like CRS as a way to shift their newly mandated liabilities onto third-party temporary staffing companies.
“This allows our client base to really not be inundated with different regulations and different compliance requirements,” Messina explains. “It allows them to really concentrate on their core business, increasing their revenue, and building their client base. It shifts the liability to us to maintain their increasing needs periodically, during peak season, for the employee base.”
Messina says we’ll continue to see this kind of outsourcing of compliance as more and more retailers turn to temporary staffing companies and supplemental workforces.
Will supplemental workforces be the wave of retail’s future? It’s too early to say, but with staffing firms like CRS stepping up to manage liabilities for its clients, it’s easy to see why retailers would gravitate toward an employment model that increasingly relies on supplemental workers.