Salad bars are opening back up across the country, but at Metcalfe’s Market the self-service station at one of its three Wisconsin stores remains closed. The culprit isn’t pandemic restrictions, but rather the labor shortage that’s frustrating retailers across the U.S.
“I can guarantee you that our customers want our salad bar,” said Tim Metcalfe, co-owner and president of the grocery store. “They want a self-serve option for hot foods. Metcalfe’s is not providing that.”
The current worker shortage, driven nationwide by a host of factors including childcare concerns and competition from reopening restaurants, continues a staffing challenge that stretches back years for Metcalfe’s. Fewer people have been looking for work, and the increased benefits during the pandemic from the federal and local governments have encouraged unemployment, Metcalfe said.
Metcalfe’s has made do. During the pandemic, it shifted workers from shuttered departments like its coffee shops to higher-demand areas. In recent months, it’s pumped up worker-appreciation efforts, like giving out “Supermarket Superhero” shirts and free food, and turning Employee Appreciation Week into a month-long event. The grocer has doubled its referral bonus to $200 and added a signing bonus that ranges from $500 to $1,000, depending on the position.
Amanda Metcalfe, the grocer’s director of employee development, said appreciation efforts have helped with retention and sign-on bonuses have attracted a few people. But the company is still struggling to make up for worker losses it has experienced due to COVID-19 concerns, retirements and poaching from competitors that can offer higher wages and bonuses.
The Metcalfes said their No. 1 priority right now is retaining workers in highly skilled positions in areas like the meat and deli departments.
“In this environment that we're in right now, you need to be marketing to your people almost more than you’re marketing to customers,” Tim Metcalfe said.
Looking beyond signing bonuses
Like Metcalfe’s, grocers nationwide have rolled out sign-on bonuses of as much as $1,500 — a staggeringly high incentive for what in many cases are entry-level positions.
Throwing money at the problem, however, offers limited ability to stand out in a labor market where fast-food restaurants, department stores and other sectors are all offering similar enticements, experts say.
That’s pushing grocers to take a closer look at the unique culture and benefits they offer. PCC Community Markets, for example, has sought to attract people who might also be considering working in the restaurant sector by emphasizing its made-from-scratch foods, Marissa Esteban, manager of staffing and justice, equity, diversity and inclusion for the Seattle-based co-op, said in comments the Seattle-based co-op provided by email.
The chain, which currently operates 15 stores, plans to hold job fairs during the summer in an effort to fill more than 100 positions, including roles for meat cutters, cooks, bakers and cashiers, Esteban said.
"Local grocers, restaurants and others in the hospitality industry are all competing to build — and in some cases build back — a workforce that seemingly isn’t there," Esteban said. "So, we are often pursuing service industry workers that are also being courted by restaurants. We are thinking creatively about our strategy and who we are trying to outreach to."
In March, PCC raised its referral bonus from $200 to $300 and is currently offering a $500 bonus to people who join the deli or meat departments.
Françoise Carré, research director at the Center for Social Policy at the University of Massachusetts Boston, said the fact that unemployment isn’t particularly low right now — the current rate is 5.9%, according to the Department of Labor — indicates there could be deeper concerns keeping workers from taking jobs at grocery stores.
The Washington Post recently reported that many retail workers, fed up with low pay and burned out from working in stores and warehouses during the pandemic, are defecting to higher-paying positions in environments that are less demanding.
Given this, Carré said retailers may be overly focused on quickly hiring workers to meet current needs. “Are they putting anything in place that would be durable, or are they just doing very short-term things to see if they can prompt some response?" she asked.
Beyond offering higher wages, grocers would do well to market their positions as opportunities for growth and advancement, said Chris Tilly, a professor at the Luskin School of Public Affairs at the University of California, Los Angeles, and an expert on labor markets.
"Back when retail was a relatively desirable job, part of what made it that way was you actually could have a retail career, and it was not just a very small number of people who became supervisors and managers and took that path to the top," he said.
Online grocer Misfits Market is combining competitive pay with unique benefits and community-building opportunities. Entry-level pay starts at $16.50 per hour, and workers can earn up to $18.50 per hour with additional shifts and weekend work at its New Jersey fulfillment facility, which also offers paid 30-minute lunch breaks for full-time workdays, Chief Operating Officer Chris Nelson wrote in an email.
Across the country, all workers for Misfits can bring home roughly $150 per month of groceries. The e-grocer also offers attendance bonuses, provides warm clothes for workers at refrigerated facilities and has several committees, including safety; employee engagement; and diversity, equity and inclusion, for employees.
“Flexible shift schedules are key, along with competitive pay and incentives,” Nelson said.
SpartanNash CEO Tony Sarsam said the retailer/wholesaler is also looking to offer workers scheduling that is more flexible and predictable.
“Schedules in this industry can be notoriously variable, and we prefer to be able to get to a place where those schedules are more consistent,” he said in a recent interview.
Hy-Vee, meanwhile, credits new benefits implemented over the past year for the “very positive response” it’s seen from applicants, Christina Gayman, spokesperson for the grocer, wrote in an email.
Last year, the Midwest grocer rolled out a 10% employee discount on groceries, extra pay on select holidays and part-time insurance and tuition assistance for employees and their family members at Bellevue University. The grocer also debuted free employee membership for Care.com, access to PerkSpot for special discounts, two weeks of paid parental leave, adoption reimbursement and fertility reimbursement, and an increased 401(k) company match.
"Are they putting anything in place that would be durable, or are they just doing very short-term things to see if they can prompt some response?"
Research director, Center for Social Policy at the University of Massachusetts Boston
Trying new things
Other chains are using their operational heft to fund new incentives like tuition reimbursement and special training programs. Employees at Ahold Delhaize’s Hannaford banner are eligible for 15% off tuition at Husson University in Bangor, Maine, according to a recent press release. Last month, Walmart announced it’s giving out smartphones to more than 740,000 workers.
Beyond adding popular incentives, grocers need to take a hard look at the career paths they’re offering workers, and how clearly they’re communicating those opportunities, said Barb Renner, vice chairman of consumer products at management consulting firm Deloitte. She also recommended grocers regularly survey workers to gauge morale and get input on what the company could be doing better.
“I think doing it on a more regular basis and understanding what’s making the most impact is something that would be much more beneficial than a static survey once a year,” Renner said.
Like Metcalfe's, independent grocers are having a hard time keeping up with chain competitors on worker pay and incentives, said Greg Ferrara, president and CEO of the National Grocers Association. “There's a bidding war out there, which is providing a lot of challenges,” he said.
But small grocers still have opportunities to “move a little quicker and think a little more differently” when responding to issues, Ferrara noted.
“Maybe it's flexibility around weekends [and] understanding the challenges around childcare and thinking outside the box and how you can make it a more attractive place to work,” he said.
Metcalfe’s is reviewing payment research to help set compensation at or above market rate for jobs, especially the hard-to-fill roles, said Tim Metcalfe. The grocer’s current benefits include a 401(k) with a 3% company match for full- and part-time workers, access to 200 online training courses and a 20% employee discount that has been a “huge draw” in the past for the company, the Metcalfes said.
Currently, Metcalfe’s is looking at adding flexibility, like shift swapping, four-day workweeks and other perks like pet insurance. In a bid to embrace the gig economy, the grocer aims to have a new human resources system within the next year or so that lets workers pay themselves as soon as they have completed their hours, Amanda Metcalfe said.
The grocer is also considering gig workers for delivery and exploring how to use less labor across its systems. “We're looking at that at every aspect of things that we do,” Tim Metcalfe said, noting that the company is eying technology to reduce labor like robots to clean the floors overnight and Sally, the salad-making robot.
Other grocers are turning to gig workers, as well. For example, Hy-Vee added a flex worker position in late 2020, mainly for its online shopping service, and has since brought on more than 1,000 workers in that role serving several stores, according to the grocer.
Craig Boyan, president of Texas grocer H-E-B, predicted during a recent trade show panel that the “labor crush” will start to ease in the fall. But Tim Metcalfe isn’t getting his hopes up that the labor shortage will end anytime soon. If anything, he thinks the retail industry will fundamentally change by rolling out more innovations to meet hiring demand.
“This environment that we're in right now is going to be here for a while, unless there's a change in the economy … I think maintaining the staff that you have becomes way more important,” Tim Metcalfe said.