Through the retail lens: Hiring for the holidays

Mark McKee, president and chief operating officer of online payroll processor OnPay, has a unique perspective on the intersection of small business and human resources. OnPay processes more than $2 billion annually in payroll for small businesses across the United States.

He spoke with NRF about the hiring outlook for small retailers heading into holiday 2020.

What should small retailers be thinking about as it relates to hiring and retaining employees as prep for the holidays begins?

NRF has indicated that holiday retail sales grew 4.1 percent last year, but what will happen for Holiday 2020 is still unknown. Consumers have changed their spending and shopping habits over the last several months: Many shoppers have transitioned to only shopping online or using curbside pickup, so successful key performance indicators will likely look different this season.

Recent research from McKinsey indicates consumers are focused on shopping for essentials with discretionary spending on a decline. And it’s difficult to know this year which of these categories gifts will fall into.

This all means it’s difficult to predict staffing needs for this holiday season as compared with previous years. It will be important for small retailers to carefully assess their staffing and coverage needs both for their existing team and any seasonal hires. And, if not already using them, now is the time to consider adding timekeeping and scheduling tools to streamline back-office tasks and maximize productivity.

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What do retailers need to know before bringing back furloughed employees?

Some retailers have had to make difficult decisions over the last six months and placing employees on temporary leave may have been one of them. While furloughs can offer a way to cut staffing costs for employers, there is a risk for attrition as furloughed employees look for other employment if they aren’t receiving wages or unemployment benefits.

As retailers begin to plan for the holiday shopping season, they should consider how they will recall furloughed workers — timing for any communications and how to return them to the workplace — and assess any need to hire new team members to fill in gaps in availability or skill sets.

For those employees who’ve been away from the store for a while, talk through any adjustments in hours or services, address new safety protocols, and review any changes to the employee handbook.

Your research found only 12 percent of small businesses say things are “normal” for them right now. What are they anticipating about when, or if, things will ever return to some semblance of normal?

Business owners and employees told us that they are generally optimistic that business will pick up this year — even if things look very different right now. OnPay conducted our State of Small Business survey right as shelter-in-place orders were beginning to lift, and more states were cautiously moving into the reopening phase. At that point, 62 percent of small business owners believed the return to normal would happen this year, and 43 percent expected to see an increase in annual revenue in spite of the disruptions that have affected them.

The small business owners we work with are doing their best to adapt and are coming up with creative ways to build cash flow. For example, one of our clients owns a bricks-and-mortar yarn shop in Texas and has pivoted and taken its storefront online to sell all over the United States. It was something they were working on before March, but the pandemic shifted it into high gear. They have also been savvy about the way they market their solutions, taking to social media and sharing their products as a way to beat quarantine boredom and pick up a new hobby.

The pandemic has been a challenging time for small businesses, but it takes guts and ingenuity to start a business to begin with. For those reasons, I’m confident most small businesses will get through this and come back stronger than before.