How Earned Wage Access Could Give Retailers a Hiring Boost for the Holidays

Over the last few weeks, major retailers like Macy’s, Target, and Dick’s Sporting Goods have announced their seasonal hiring plans for the 2024 holiday season. In stark contrast to last year, which saw them struggling to hire enough workers to meet demand, many of them are hiring for about the same number of positions or less. This isn't surprising as holiday shopping forecasts have been middling as consumers pull back on spending due to concerns around inflation, the return of student loan repayments, and rising gas prices.

While retailers should still approach the holiday season with caution given the unpredictable nature of the economy, they should also be prepared for all possibilities. The recent jobs report saw the addition of 336,000 jobs in September, which exceeded Wall Street economists' expectations. Additionally, PwC’s recently released 2023 Holiday Spending Outlook found that 40 percent of consumers plan to spend more than they did during the 2022 holiday season. Should this positive trajectory continue, retailers that have been slow to ramp up their holiday hiring plans for this year might face challenges securing qualified talent promptly and would benefit from considering strategies to make job positions more appealing.

As a tight labor market and inflationary pressures linger, retailers need to look towards benefits beyond competitive wages to encourage workers to apply. Incentives like discounted merchandise, significantly reduced application times, and referral bonuses are already in the works. Additionally, on-demand shift scheduling is also being touted as a highly desirable perk, aligned with a wider demand for more flexibility in different areas of work by employees.

One of the increasingly popular benefits that workers are gravitating towards is earned wage access (EWA), a solution that allows employees to access their pay outside of the traditional payroll cycle.

By offering this benefit, employers demonstrate their commitment to supporting employees’ financial well-being by making the paycheck-to-paycheck stretch significantly less stressful. This also reduces the need for workers to rely on predatory financial products like payday loans which often negatively impact their financial health in the long term.

The following are the ways EWA has already proven to help businesses motivate their workforce and how retailers can adopt the solution and realize its benefits.

Increased Job Applications

By providing EWA to employees, retailers can gain a competitive advantage in the hiring market in order to attract qualified talent. Research has shown that 81 percent of employees say they would take a job with an employer that provides access to earned wages over an employer that does not. During the holiday crunch, timing is of the utmost importance and retailers often need to hire quickly to meet the holiday surge.

Improving Productivity

The holiday shopping season is the most opportune time for retailers to generate revenue, which often means that employees are under duress to meet sales goals, maximize store efficiency, and navigate logistical challenges. To ensure employees perform at their best, it's ideal to reduce other sources of stress in their lives. Unfortunately, 57 percent of employees state that finances are the top source of personal stress. EWA can bridge the gap between paydays and give employees greater financial control, thereby reducing a top source of stress and maximizing their productivity.

Reducing Turnover

While retailers tend to see their highest revenue periods during the holiday shopping season, the cost of high employee turnover could impact their profit margins during an already economically challenging year. Turnover rates last year reached 75.8 percent, the highest they have been within the last few years. Offering EWA can help retailers mitigate employee turnover. There's strong evidence that offering more benefits has an impact on reducing their desire to leave. In fact, 80 percent of full-time employees say benefits impact their decision to stay with a company.

Given the unpredictable nature of the economy, even with recent positive job reports, it's still challenging to forecast how fruitful this holiday shopping season will be for retailers. While cautious optimism is the best approach based on available information, retailers would do well to prepare to adapt swiftly should there be an unexpected economic upturn. With indications that consumer holiday spending could defy conservative expectations, retailers should strategize proactively to attract and secure qualified talent to ensure their success during the most important shopping season of the year.

Alex Bradford is the co-founder and CEO of Rain, the platform that helps companies give employees greater control over their finances with the Earned Wage Access benefit.