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Outlook Survey 2018: Working Through Labor Woes

Economic realities make it incredibly tough to compete for hourly employees

CHICAGO -- A good employee is hard to find. Heck, right now, any employee is hard to find. Just ask David Ivins, store manager of Kilgore Food Mart, Kilgore, Texas, in the heart of the East Texas shale-oil fields.

There is perhaps nowhere else the labor market is so closely tied to the state of the local economy. As of press time, West Texas Intermediate crude was trading at more than $73 per barrel, so the labor market was tight as the local oil industry hummed and attracted workers with its higher-paying jobs. That makes it incredibly tough for a c-store to compete for hourly worker talent.

“When there’s a tight job market, I can put up a sign, advertise on Craigslist, Facebook and so forth that I need an employee,” says Ivins. “I might get five applications over a two-week period. Three of those I wouldn’t consider talking to because of their past history or whatever. I can interview two; one I’ll offer a job to, and it’s not uncommon for them not to be there after two to three weeks. So finding a steady crew, a crew I can count on to show up for work, is difficult.”

What are the top three biggest business challenges you face today?

Source: CSP 2018 Outlook Survey

Compare this to just a few years ago, when the oil was trading in the range of $20 to $30 per barrel. “I could put a sign up on my front door and have 10 applications by the end of the day,” Ivins says. “In a good business climate, my biggest challenge is finding people to work.”

For Outlook Survey participants, the tight labor market was the biggest business challenge—so much so that nearly 40% said it was hindering their ability to open new stores.

“To retain people, a 3% to 5% raise is no longer viable.”

What are the biggest roadblocks to expanding your store count?

Source: CSP 2018 Outlook Survey

Eva Wang, CFO of Vintners Distributors Inc. and AU Energy LLC, Fremont, Calif., says California-based operations like hers are also feeling the labor squeeze and seeing high turnover—in particular because of the high cost of living in her state and local minimum-wage increases.

“Even Google engineers can’t afford to own their own home or rent an apartment,” she says. “It gives you an idea of how crazy the cost of living has increased. To retain people, a 3% to 5% raise is no longer viable. As people find a better job that pays a little more, despite whether willing to admit it, they will be willing to leave.”

Which issue or trend will most affect your business in 2019?

Source: CSP 2018 Outlook Survey

Next: The In-Store Opportunity

Click here to read the complete Outlook Survey report.

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