4 Labor Takeaways From NACS' SOI Summit

ROSEMONT, Ill. -- Back in 2007, economist Bill Conerly (pictured) gave a presentation to a group of business executives. He told the audience that they were going to see a worker shortage in 10 years, and he gave some advice for how they can prepare for a tighter labor market.

No one took notes, he said.

Today, staffing challenges are at the very top of retailer’s minds, and many convenience-store operators likely wish they had braced for a tougher hiring climate. Better late than never, several strategies for staff hiring and retention were addressed during NACS's 2018 State of the Industry (SOI) Summit in Rosemont, Ill. Here's a look at what stood out ...

1. C-stores’ fleeting immigrant workforce

When it comes to U.S. immigration policy, there’s more talk than action, said Conerly, principal for Conerly Consulting LLC, Lake Oswego, Ore.

President Donald Trump has sought to tighten security on the Southern border, deploying the National Guard in Texas and Arizona, calling for an end to the “catch and release” of immigrants awaiting hearings and promising to build a wall along the U.S.-Mexican border. Even without the enactment of those policies, arrests along the Southwest border fell by nearly 24% in 2017 compared to the previous year, suggesting border crossings have dropped, according to the Department of Homeland Security.

“If Donald Trump were to tweet, ‘Hey @billconerly, what’s your advice on immigration?’ ” Conerly said. “I’d tell people the wall has already been built, and it’s working. We’re seeing less immigration already.”

Looking ahead, slowed immigration might make retailers’ jobs harder. From 2020 to 2030, Conerly predicts that the U.S. will have fewer people adding to the working-age population than it did during the Civil War. “We’re entering the tightest labor market that any of us has ever seen,” he said. The economist asked retailers to envision their long-term plans for their business. If those plans include expanding in size or locations, he recommended that retailers start thinking how they’re going to recruit those candidates.

With a labor force participation rate of just 63%, some c-stores might be competing with welfare wages. In states that offer welfare benefits totaling $13.50 to $15 an hour, the labor-force participation is sometimes lower.

“We are going to have to compete with the welfare-equivalent wages to get them to work for us,” said Andy Jones, president and CEO of Sprint Food Stores Inc., Augusta, Ga.

But that lower participation rate also means c-stores might have to rely on immigrant labor. “There are fewer and fewer native born citizens in the United States,” Jones said. “We’re going to need to hire more and more immigrants to fill job vacancies in the future.”

2. Slow and steady hiring

Conerly gives the same advice to his sons in the dating market as he does for retailers in the labor market: “You don’t want to put all your emphasis on that first person; it will take a while,” he said. Nine years following the Great Recession, the United States boasts a 4.1% unemployment rate, which makes finding talented workers tough. It now takes 31 days to fill a vacant job, up from 23 days in 2006, according to data from Deutsche Bank.

Retailers were not able to solve the industry turnover-rate issue in 2017, Jones said. However, both associate and manager turnover saw some relief. Associate turnover dropped to 115% last year, compared to 133% in 2016, according to the NACS Compensation Report. And manager turnover fell to 18%, down nearly 10% from 2016. Associate wages rang in at more than $10 an hour for the first time in response to the competitive labor market.

Ultimately, keeping people is cheaper than finding new ones, and front-line managers affect whether people stay or go, he said. “No one quits for 25 cents an hour; they quit because their boss is a jerk,” Conerly said. While Conerly wishes it were as simple as de-jerkifying management, he’s had retailers say it’s more about supervisors' overflowing workload. C-store operators need to make sure pay is competitive, but perhaps put more dollars into training managers than boosting wages.

3. Tech support for labor woes

Investing in technology might make retailer’s lives easier, Conerly said. Instead of robots taking Americans’ jobs, robots will likely take the empty seats, the positions c-stores cannot fill, he said. With the cost of computers and tech down by about 15%, Conerly said retailers ought to look for opportunities for technological advancement to reduce the need for employees in the future.

4. A case for a compassionate workplace

At 18 years old, Scott Stratten (pictured) was an angsty teen slacking off at his movie-theater job. Stratten, now president of UnMarketing, said that all changed when his manager demonstrated that she had his back when an angry customer began verbally attacking him. Stratten said he became the best usher in the history of the movie theater and that he would have followed that manger anywhere.

“We’ve lost empathy in the workplace, especially for young people,” he said. “Empathy is a wonderful trait of endearment. You want to make employees want to work somewhere, have empathy, have their back.”