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Outlook Survey 2020: Labor Aches

Potential employee pool shrinks even as unemployment skyrockets

CHICAGO —Hiring troubles have plagued most sectors of the U.S. economy during the pandemic. In April, the U.S. unemployment rate hit a staggering 14.7%, the highest since the Great Depression. While that moderated to just below 8% in September, it still rivals rates from the Great Recession a decade ago. Despite the decline, c-stores are still battling to hire and retain staff. Nearly three-fourths (71%) of retailers said that they’ve struggled to hire employees this year, according to CSP’s 2020 Outlook Survey, while 68% said they’ve struggled to retain current staff.

One catalyst for the labor woes was increased unemployment benefits. A staggering 84% of retailers said they believe the increased unemployment benefits from the Coronavirus Aid, Relief and Economic Security (CARES) Act have contributed to the c-store industry's hiring struggles in 2020, according to the survey. From late March through July 31, any U.S. citizen collecting regular unemployment compensation became eligible for the Federal Pandemic Unemployment Compensation Program (FPUC), which provided an extra $600 per week.

These increased benefits brought on by the CARES Act resulted in many out-of-work individuals opting to remain home rather than seek employment, a trend that has plagued c-stores, which largely offer hourly, minimum-wage positions. Soon after the $600 stipend ran its course, on Aug. 8, President Trump enacted the Lost Wages Assistance program, which paid a $300-a-week federal supplement to unemployment benefits for six weeks. Like the FPUC, the Lost Wages Assistance program was added on top of any unemployment benefits workers were already receiving.

“Governors make it too easy for people not to work or return to work,” one survey respondent said.

While additional COVID-19 assistance programs had stalled in Washington as this story went to press in early October, c-stores are still struggling to bring on new employees, largely because of safety concerns in addition to financial implications.

“We really need to provide for people that lost their job—and through no fault of their own—as a result of the economic shutdown and COVID-19,” says David Nelson, senior partner for c-store and foodservice consultancy Business Accelerator Team, Scottsdale, Ariz. “We should be doing extra stuff for them.”

A tight labor pool doesn’t help either, and retailers are nearly split on whether this will improve. Forty-five percent of operators said they expect their labor pool and hiring issues to improve in 2021, while 55% said they expect them to either worsen or remain the same, according to CSP’s survey.

Retailers can help their cause by looking for workers in competitive channels, such as restaurants or supermarkets, says Roy Strasburger, president of c-store management services company StrasGlobal, Temple, Texas.

“We've stepped up our poaching of people from other stores,” he says. “We've always been looking for good people to work with us, and we're just kind of recasting our net a little bit wider.”

Strasburger is part of the group that sees c-store labor and hiring issues improving in 2021. He thinks that hiring will “sort itself out” by the end of 2020 as unemployment stipends end, compelling people to find work.

“One way or another, things will get better,” he says.

How do you expect your labor pool and hiring issues to unfold in 2021?

Do you believe the increased unemployment benefits from the CARES Act have contributed to the c-store industry's hiring struggles in 2020?

Source: CSP’s 2020 Outlook Survey | Numbers may not add to 100 due to rounding.

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CSP’s 2020 Outlook Survey conducted between Sept. 9-23 and fielded 74 responses from CSP readers. Click here to visit report landing page.

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