Boston's tight labor market, sky-high real estate prices squeeze seasonal hiring | Crain's Boston

Boston's tight labor market, sky-high real estate prices squeeze seasonal hiring

The Retailers Association of Massachusetts forecasts a 3.1 percent lift in sales this holiday season compared with last year—welcome news for Boston-area retailers after 2016, when holiday-season sales dipped for the first time since 2009, dropping 1 percent from the previous year.

That’s translating into a local hiring push for national chains and local establishments alike, but those efforts may be bumping up against a regional labor market strained by booming development and low unemployment. Some businesses in the Boston area say hiring has become difficult year-round because the labor market is tight, and soaring real estate prices have pushed the workforce far from where the region’s jobs are.

Greg Reibman, president of the Newton Needham Regional Chamber, said one general manager of a local hotel told him that problem had reached a “crisis level.”

“There's a real shortage especially, in our case, in these well-off suburban communities where there is plenty of retail activity and a lot of interest, but it's really hard to attract the hourly workers you need to the stores to the restaurants,” Reibman said.

The median home value in Needham is $841,200, and $961,900 in Newton, as compared to an average of $430,000 in the metro area, according to Zillow. Many erstwhile employees of hospitality and retail businesses in the area commute from working-class neighborhoods and suburbs like Chelsea, according to Reibman.

“It’s difficult unless you have a car and you really can't afford to live here, so you are talking about finding workers who need to come from another market,” said Reibman.

Making things worse, he said, the overburdened MBTA transit system isn’t oriented toward service jobs, which might require early hours and late nights outside the typical 9 to 5 rush hour.

In addition to competing with online retailers like Amazon, Reibman said, some Boston suburbs are finding the local labor market is stretched too thin.

“So many more restaurants have opened, and they're all looking for the same wait staff and chefs, line cooks and kitchen help. So our prosperity is fantastic, but it has put a real burden on employers getting really good quality workers.”

Meanwhile several national chains report steady hiring in the Boston area for the holidays.

Erin Conroy, a Target spokeswoman, said Target plans to hire about 1,500 seasonal employees in the Boston area. That’s a small fraction of the 100,000 they’re hoping for nationally, up 40 percent from last year.

Conroy said they've already seen a 30 percent increase in applications nationally, and suggested that could be because of the company’s plans to increase its minimum wage to $15 an hour by the end of 2020.

Despite the flood of applicants, Target and most other retailers are still looking for help.

“We still have openings to fill at our Target store locations and look forward to meeting more applicants,” Conroy said. "We’ve been incredibly pleased with the caliber of applicants.”

Carter English, a spokesman for JCPenney, described a similar situation. The company is looking to hire 40,000 seasonal employees and promoted that push with a “National Hiring Day” in October, where English says they received more than 30,000 applications. Like Target, JCPenney touted wages above the federal minimum as a possible reason for the surge of applicants.

A spokeswoman for Macy’s said their seasonal hiring is ahead of last year’s pace, with about 300 positions left to fill of 1,400 total in the Boston area.

“Our hiring is going well in Boston,” said Blair Rosenberg, “but we still have a number of open positions in the market.”

Other retailers are pulling back seasonal hiring as Amazon and other online retailers continue to put pressure on brick-and-mortar stores.

Walmart has said it will not make any seasonal hires this year, opting instead to schedule its year-round employees for more hours during the holiday.

Representatives for Amazon and Walmart did not return requests for comment and seasonal hiring data.

Kohl's is expecting to hire at a similar level as in recent years, said spokeswoman Melanie Hochschild, who did not reply to requests for additional information. Last year Kohl's hired 69,000 seasonal workers, but CNBC reports the company is breaking with tradition and keeping this year's number a secret.

November 17, 2017 - 6:04pm