Labor shortages continue to hurt businesses

0

The so-called ‘big resignation’ continues to worsen an already tight labor market as people reconsider their career paths in the wake of the unprecedented global impact and economic fallout from the COVID-19 pandemic.

Amazon CFO Brian Olsavsky told the Financial Times that for the “foreseeable future” its problems in meeting demand have more to do with the workforce, something which is “new and not welcome.”

Norfolk Southern chief operating officer Cynthia Sanborn said retention is another issue, with attrition intensifying in the last two quarters of 2021.

See also: Retailers rely on employees to do more when labor shortages

Employers have started to tackle the problem by raising wages, with Costco, for example, now offering a minimum hourly wage of $ 17, and Starbucks, McDonald’s and others following suit.

Despite higher salaries, the CEO of McDonald’s Chris Kempczinski said the company is still short-staffed and has had to cut night hours at many locations.

“I think the environment is going to continue to be tough over the next few quarters,” Kempczinski said.

The world’s largest restaurant chain by revenue, McDonald’s passed the cost of higher wages onto consumers, just as Kimberly-Clark, Kleenex and other big brands have. McDonald’s predicts that prices in 2021 will be 6% higher than last year.

Read more: Higher wages are not the main reason workers take jobs

Labor shortages add to existing issues that retailers face, such as manufacturing and transportation delays. Inflation of commodities such as steel has also contributed to the rise in consumer prices.

The National Retail Federation issued a statement last week that vaccination mandates could exacerbate labor shortages, calling it a “politicized debate” that could negatively affect the holiday shopping season.

Some companies have used automation to deal with the shortage of workers. Chief Operating Officer of Waste Management John morris said the move is a “risk reduction mechanism” as the job market is now different and some positions “no longer attract the interest they once aroused”.

——————————

NEW PYMNTS DATA: 2021 HOLIDAY SHOPPING PERSPECTIVES

On: It’s almost time for the holiday shopping season, and nearly 90% of US consumers plan to do at least some of their purchases online, 13% more than in 2020. The 2021 Holiday Shopping Outlook, PYMNTS surveyed over 3,600 consumers to learn more about what drives online sales this holiday season and the impact of product availability and personalized rewards on merchant preferences.


Source link

Share.

Comments are closed.