Santa’s nice list must be awfully long this year because U.S. holiday shopping projections have reached an all-time high of $1.04 trillion, with as much as 21 percent of that expected to come through e-commerce orders, according to Deloitte.
But the guy in the red suit can’t deliver all those gifts on his own, which is why retailers and delivery services alike are ramping up holiday hiring earlier than ever before.
Amazon announced a holiday hiring spree of 120,000 workers, with Target close behind at 100,000. UPS is looking to add 95,000 to its ranks during peak season while FedEx is seeking 50,000.
Even retailers in distress or with declining storefront presences are girding themselves against the holiday rush. According to MarketWatch, Macy’s expects to hire 80,000 workers for the season, and 22 percent of those jobs will be in e-commerce fulfillment centers.
While all these open jobs might be a boon to consumer sentiment and spending, a troubling question looms: Do we have enough workers to fill all those jobs?
Getting enough workers in the door every day is a challenge, especially when they have their choice of similar jobs, sometimes at neighboring fulfillment centers or warehouses. This quandary has some retailers such as Target offering raises in base pay that far exceed the federal minimum wage standard, according to the New York Times. But once you’ve hired them, you’ve also got to train them, which is a costly investment with turnover rates as high as 44 percent in some fulfillment houses.
This may be one of the reasons Walmart made the surprising choice to sit out the holiday hiring bonanza this year and instead double down on existing (and trained) employees by offering lucrative overtime hours in its retail stores and fulfillment centers.
Labor is almost always the greatest source of cost in a retail fulfillment operation, with shipping costs and damage losses coming in a close second. Labor is also the source of most of the wasteful mistakes such as overpacking (using excess of packaging material which increases supply costs), under-protecting (using too little material which drives up damage rates), box selection errors (picking corrugated boxes that are too big for the items inside and incurring a higher shipping rate), and order errors (mistakes resulting in returned products which require more labor to process and re-send).
At a time when consumers have practically unlimited choices for where to place their holiday orders, and heightened expectations for what a satisfactory at-home delivery experience should be, retailers cannot afford these kind of costly mistakes from the temporary labor force.
There is, however, a shockingly simple source of relief: smarter packaging systems. These innovations can turn even temporary hires into efficient assets for retailers, and cut down on training time:
Automated systems that dispense the correct amount of packaging material
Systems that create packaging on demand at the touch of a button
Boxes that are right-sized to fit the items, which result in reduced shipping costs
Interactive apps that instruct new hires on the best way to pack an item with minimal waste and maximum speed
Is your retail or fulfillment operation prepared for the challenges of peak holiday season? Register for Sealed Air’s free webinar to learn more about how simple operational changes can maximize labor efficiency, decrease the risk of damage, and keep shipping costs low during periods of peak volume.