• 12 min read

Grocery Labor Market Trends: Retailers Share Insights from the Last 18 Months

Partners TimeForge and North Country Business Products present data from a recent survey of mid-to-large grocery businesses. Learn how grocers have been impacted by labor market trends - and the strategies they’re using to overcome challenges.

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The past 18 months have presented a number of challenges to retailers. From the rising cost of labor to the worker shortage, businesses have been forced to adapt in order to keep up with changing trends and increased competition. And the competition hasn’t just been limited to the marketplace; the hiring pool has been significantly impacted, as well.

How have grocers been affected by the changes of the past 18 months, and what strategies have they been using to deal with labor challenges?

In this study, industry-leading partners TimeForge and North Country Business Products present data from a survey of mid-to-large retail businesses conducted in September 2021. We asked grocers whether and how they’ve been impacted by changing labor market trends, how severely, and what strategies they’ve found most effective in dealing with change.

Here are the results.

Labor Market Trends Have Had a Significant Impact on Grocers

When asked whether the labor market trends of the last 18 months have impacted their business, respondents said yes. 10% said they felt a slight impact, 30% a moderate impact, and 60% claimed a significant impact to their business.

a graphic showing results from the survey on grocery labor market trends

“The information and feedback our customers provided in this survey matches what our Account Managers are continuing to hear,” said Jeff Zimmerman, Director of Sales at North Country Business Products. “Hiring and retaining good employees is a key area of concern for them. Turnover, training and staffing issues significantly impact their ability to provide a good shopping experience for their customers.”

survey respondents
About the Survey Respondents
  • For this study, we collected survey data from grocery retailers, most of which are located in the American Midwest. 
  • The majority classified themselves as suburban and/or rural businesses (image left), with 20% also operating in an inner city environment.
  • The size of the businesses range from medium (4-7 lanes) to enterprise (10+ lanes).
  • All of the retailers polled are customers of North Country Business Products.

Hiring is the Area Most Affected by Grocery Labor Market Trends

By far, the area cited as most affected was hiring. Over 70% of respondents indicated that hiring was their number one challenge as a result of changing labor market trends. Second to that was employee retention, with employee engagement coming in third. None of the respondents felt that their training or communication efforts were the biggest challenge.

grocery labor market trends primary challenge

All things considered, the results aren’t too surprising. Many businesses appear to be struggling to find, hire, and retain reliable hourly workers. Jeff Zimmerman confirmed, “This data mirrors what we are seeing and hearing from our own customers. There is a constant struggle to find and hire good employees.”

What's Influencing the Grocery Labor Market Trends

We also asked respondents to indicate what they felt has influenced the current labor market changes. Over 40% of retailers said they felt that government subsidies were an influential factor in current trends. Other factors included the COVID-19 pandemic, job candidates being reluctant to work, salary or compensation concerns, and “Other.”

Under “Other,” manually-entered responses included “Not sure” and “All of the above.”

labor market influences

“The labor shortage has become in some ways a divisive topic,” said Audrey Hogan, SHRM-SCP and Chief Operating Officer of TimeForge. “The data from this study reinforces the idea that many employers are feeling like their state or federal government is exacerbating their headaches. Though opinions differ on the primary cause of changes, I think most businesses agree that the labor shortage is the result of many circumstances aligning the wrong way at the wrong time. Despite the industry’s valiant efforts to combat the shortage, some of the issues are snowballing; even in areas without minimum wage hikes, the competitive nature of recruiting has led to increased wages – further complicating employer positioning.”

Even so, grocers are finding ways to differentiate themselves in order to overcome some of the most difficult challenges.

About North Country Business Products (NCBP)

North Country Business Products (NCBP) has humble roots dating back to 1948, when we started as a single storefront selling basic office equipment and supplies in Bemidji, MN. Since then, we’ve transformed and grown into a nationwide retail technology solutions provider dedicated to meeting the evolving needs of our customers.

As a trusted partner and advisor in retail technology, we put our customer’s goals and interests first, and we take a best-in-class and people-oriented approach to ensure we deliver targeted, reliable and cutting-edge solutions. We do it all with expert system design, integration, implementation, project management, and support services that help guarantee your success.

While the products and services we deliver have evolved, our commitment to excellence and to our customers has remained constant and unwavering. As a 100% employee-owned company, we have an individual stake in our company’s success, and we know that achieving that begins with ensuring our customers’ success—with the highest level of product quality, services and support.

Responding to Grocery Labor Market Trends and Challenges

When asked what strategies have been most effective in dealing with labor market challenges, the leading response was employee referrals (70%). This was followed by higher wages (60%), more investment in recruiting (30%), and new software or automation (20%). Retailers were allowed to choose multiple strategies.

Only one retailer said they haven’t used any new strategies.

a graphic showing respondents choices about which strategies have been most effective in helping them deal with labor challenges

Grocers Rely on Employee Referrals

The data from this study show that businesses are leveraging their current employee base for recruiting.

“As an industry, retail has always known that employee referrals can be a powerful source when recruiting,” said Audrey Hogan. “However, I don’t think we fully appreciated how critical referrals would become. We’re clearly seeing here that employees really can be your best advocates. The labor shortage has been a litmus test for company culture; it’s exposed all of the operational practices in a spotlight – good, bad, and ugly. Businesses that leverage employee referrals capitalize on the positive culture they’ve built. They also reap rewards from the ‘good’ that’s been exposed during the past months, turning their workforce into a recruiting advocacy team.”

The good news? Struggling grocers can still turn things around. It’s not too late to make changes to the company culture or adopt incentives that employees are likely to appreciate. Positive news could go a long way toward boosting an employee referral program.

Sign-on Bonuses: Are they worth it?

Surprisingly, none of the retailers surveyed indicated that new processes or sign-on bonuses were very effective strategies for them. It’s surprising because it’s contrary to what we have seen in some advice columns for restaurants and grocers that urge them to use sign-on bonuses to attract new talent.

Yet, it makes sense that grocers aren’t putting all their eggs in that basket: sign-on bonuses are a gamble. The cost of turnover was already high before the labor shortage. Grocers simply can’t afford throw money at high-risk, short-term fixes. On the other hand, employee referrals are a much safer bet because someone you know is literally vouching for that new hire.

“We have heard anecdotal feedback from the field and felt partnering with TimeForge on a survey was a good way for us to get quantifiable information from our customers. Having these key data points will help us develop and deliver solutions targeting our customer’s pain points.”

Grocers are Spending More on Wages

As noted above, 60% of survey respondents indicated that higher wages have been an effective strategy for dealing with labor market trends, but it begs the question: where does it end? As businesses out-increase one another in competition for their local talent, the only place to go is higher. 

“It’s a race to higher labor costs in many markets, and a lot of grocers are losing when they win because they don’t have the right processes or systems in place to optimize their newly ever-increasing labor spend,” said Audrey Hogan. “What used to account for 12% of sales is now approaching 18% or more, and limited staffing and availability will have a negative impact on CSAT if the grocer isn’t using modern workforce platforms. As huge employers like Amazon expand warehouse locations and increase wages, and competitive recruiters increase their wages in response, the whole industry (even grocers in rural areas) will eventually feel the effect.”

Grocers are Investing More in Recruiting

Gone are the days of being able to count on walk-in applicants. So perhaps it’s not too surprising that businesses are investing more in recruiting and finding it to be an effective strategy – even if it’s not as effective as referrals.

“Investment in recruiting has been a necessary but difficult spend for many businesses, because they were faced with a choice of definitely not increasing their candidate pool, or only potentially increasing their candidate pool while increasing budget,” said Audrey Hogan. “But it’s just one strategy. Grocers still have other options and seem to be exploring those options either before or alongside increasing their recruiting budget.”

New Software and Automations… But Not Processes?

When it comes to other options, software and automations are some of the most cost-effective strategies out there, and grocers are taking advantage. 

“I’m not surprised that respondents are mentioning that new software platforms are working well to combat the impacts of the labor shortage,” said Audrey Hogan. “We’ve seen a large increase in grocers adopting our digital Applicant Tracking and Onboarding products. Customers frequently mention the importance of streamlining the hiring process and ensuring that their employer branding is sending the right message to candidates. Especially recently, we’re seeing more businesses stabilize enough to implement long-term strategies like our Hiring system instead of relying on short-term band-aid fixes.”

a photo of a smiling worker in a grocery or retail environment

“However, I am surprised that respondents didn’t cite new processes as a successful strategy,” added Hogan. “Process analysis and improvement can be very effective on its own, but especially when paired with the right platform and people. I find that with each new implementation of our Hiring platform, businesses analyze and re-optimize their processes for maximum impact. 

Yet, analysis and requirements for process improvement can take longer than slapping a new software product in place, so I’m curious whether the new software cited here has been used as a short-term stop-gap or as a long-term improvement for these respondents. If they already had incredible processes in place, perhaps other strategies are building on their existing success.”

Whether short term or long term, Jeff Zimmerman agrees that new processes can be a powerful tool for adapting: “Over the last 18+ months our grocery customers have been forced to pivot and adapt to new and rapidly changing pandemic protocols,” he said. “At NCBP, we believe incorporating process improvements will enable our customers to become more efficient with less staff. Our mission is to provide our customers technology solutions that allow them to thrive.”

About TimeForge

TimeForge was launched in 2004 when Anthony Presley and Erik van Gilder decided to bring their technology expertise into the retail and food service industries. 

With our roots in consultation, we know no other way to do business than to listen to what our customers have to say. We’re humbled to know that organizations great and small choose TimeForge for our hands-on approach and commitment to excellence with every interaction. Our mission is to help decision-makers and teams around the globe focus on what matters. We proudly employ out-of-the-box thinkers with decades of industry experience so that we can guarantee profitable results for every customer. 

the timeforge logo

TimeForge Scheduling was our first product – an easy-to-use shift planning tool that integrates with leading point of sale platforms. TimeForge Attendance came soon after, providing a powerful web-based time and attendance system for our customers to manage their labor costs. Customer demand led to the development and release of TimeForge Daily Log, a robust communications and manager logbook that centralizes daily notes. Then, we added human resource software with TimeForge HR. Other great solutions followed, and we’ve continued to iterate on our platform to turn it into the industry-leading, AI-driven, full-lifecycle workforce management platform it is today.

Looking Ahead: Retailers are Uncertain About the Future

Data from the survey suggest that grocers aren’t too sure about how much longer they expect to deal with labor market challenges. Or, at a minimum, they expect things to be difficult for at least the next year or two.

50% of respondents said they weren’t sure how much longer they expected business to be affected. 30% said they expected things to be difficult for at least another 2 years. 20% were more optimistic and said 12-18 months.

None of the respondents thought things would get better within the next year.

how much longer

Given that these problems aren’t likely to just disappear, grocers really do need to be thinking long-term. Once again, it makes sense that they aren’t finding bandaid solutions like sign-on bonuses to be effective. What they need are big picture strategies.

While the increased stability seen in the industry certainly isn’t the return to normal staffing that businesses would prefer, some form of stabilization has taken root. In an industry study published by TimeForge in September, they found that while employees were working longer hours than in 2019, the trend appeared to have already peaked:

Average Shift Length in Minutes by Month
Image from https://timeforge.com/resources/grocers-adopt-game-changing-technology/

“Similar to the massive shift to part-time labor in retail that was seen during the passing of the PPACA, the industry has shifted back to relying on more full-time workers (and those approaching full-time),” said Audrey Hogan. “Only time will tell us if the longer shifts and more full-timers are a permanent fixture for the retail industry moving forward.”

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