A version of this article ran in the September issue of Bicycle Retailer & Industry News.
ASHEVILLE, N.C. (BRAIN) — A shrinking pool of job candidates this summer created another challenge for an industry still navigating a turbulent supply chain. While some in the industry blame enhanced unemployment benefits for depressing the labor market, the reasons for having fewer job candidates — and for increased trouble hanging on to them — are as varied as the factors contributing to supply chain chaos.
Pay, career growth potential, health benefits, COVID-19/Delta variant fears, and a work/life balance are factors giving candidates more pause before applying for industry jobs, retailers and suppliers told BRAIN. Many said the lure of the shop lifestyle that once attracted employees isn't as strong as it once was. And the pandemic has given many the chance to reset priorities and consider other career opportunities.
Taylor Essick, whose bike-shipping company Kitzuma Cycling Logistics has been busy filling openings after starting almost a year ago, noted a decisive power shift between employee and employer.
"The candidate is more empowered these days to ask for what they need, which is pretty darn cool, if you ask me," Essick said. "There are some challenges for me as an employer, but I'm also encouraged by the fact that it seems like people are getting compensated more fairly these days, and their options are more plentiful in terms of what they can look for and what they might be a candidate for. It's just a broader marketplace for employees or candidates looking for work. They can hold their ground in negotiating."
Kitzuma's workforce — with openings for driver-tech, customer experience, and logistics positions — is approaching 30. "We don't pay anybody less than $16 an hour, but you're not getting the type of response you would have for a $20 an hour job."
Chad Mihalick, president of Malakye — an online job posting and networking site for companies and people who work in the outdoor and lifestyle fields — noted that shift.
"Companies across all the industries we touch are having a difficult time finding people to fill jobs across all departments and all experience levels," Mihalick said. "We believe it's because people are taking time to figure out what's right for this next phase of their lives and the increased unemployment benefits are helping them buy time to figure it out."
Kent International CEO Arnold Kamler said while his office hasn't been directly impacted, Kent's South Carolina factory has had some labor shortages. But the challenges faced by Kent's wholesale customers has had a larger impact.
"Many of our small- to medium-sized customers do not have enough employees, and our large customers are short of warehouse personnel, and this is causing many delays in our shipments to them," Kamler said.
Are benefits to blame?
Manpower shortages causing those delays are a growing national issue, which comes back to the expanded and more generous unemployment benefits. An Axios Morning Consult poll released in July reported 1.8 million Americans said they turned down jobs because of the enhanced benefits that began with the March 2020 CARES Act in response to the COVID-19 pandemic. This past March, the American Rescue Plan Act extended those benefits to Sept. 6. By July, 26 states cut those extra benefits early in an attempt to get people back to work.
But not all observers agree that the benefits are the root of the employee shortage.
"It has nothing to do with unemployment," countered Bob Phibbs, CEO of The Retail Doctor, a retail consultant based in New York. "The good people all have a job. That's the problem. And they're not looking to switch right now. There are a lot of market forces right now, and a lot of bike stores don't train, and it's very dependent on the owner. Remember, people quit owners. They don't quit businesses. If you're having a high turnover rate, you need to look and say what is the training I'm doing, and what's the environment I'm providing. Anybody worth their salt should be paying" higher wages.
"If McDonald's is starting at $15 an hour, your bike store better be up to $20-$25 if you really value them. If you really do believe in paying, training, and holding them accountable, then you'll earn that back. If you look at employees as disposable and complain about how hard it is to get people, well, it is hard to get people working in retail."
Attorney Jim Moss, who represents bike and accessory manufacturers, said don't discount the rising cost of daycare for keeping people at home. "On top of that, the number of daycare centers that are left decreased significantly," Moss said. "A lot of them went out of business."
However, one industry source who did not want to be identified said unemployment benefits are a factor as is the fear of contracting COVID-19.
"If you have a job that pays equal to what you get on unemployment, then people don't want to go to work," the source said. "Because they can just make that sitting on the couch. People are afraid to go back into the office. They're rethinking their lives; they're rethinking where they spend their time, and what's really important. And all of that together has made it crazy."
Is throwing money at it enough?
Offering more money would help attract a larger pool of candidates, but for some small retailers, that comes down to margins.
"Companies need to bring up their margins because if we make more, we can retain people longer," said Michael Boone, owner of Magic Cycles in Boone, North Carolina.
And for others, it comes down to doing more work themselves to get things done correctly and timely. Like Francisco Cornelio, manager and head mechanic at N + 1 Cyclery in Framingham, Massachusetts. He said hiring a mechanic this year has been especially difficult. He hired one who didn't work out, and that experience left him frustrated.
"I can't trust anyone anymore who claims they know bikes," said Cornelio, whose shop pays between $18-$20 depending on experience. "They end up making me work longer hours by revising their jobs. ... I am giving up for the rest of the year. We'll see next year and see who is responsible enough by then."
Finding that knowledgeable and efficient mechanic continues to be the unicorn many retailers continue to chase, especially these days. Chris Koos, owner of Vitesse Cycle Shop in Normal, Illinois, since 1979, said his most pressing challenge is finding experienced mechanics and builders.
While demand for service and bikes are up, at least one bike brand, which did not want to be identified, is cautious about blanket pay increases and workforce expansion during the bike boom. "The only thing I would say is the challenge of increasing compensation and benefits in the midst of growth is not knowing if that growth will sustain at the same rate."
But it doesn't have to be all about pay. Kill 'em with kindness, some say. Kat Minks, who along with her husband have two Jonny Rock Bikes retail locations in Minnesota, said fostering a family atmosphere can be just as important to keep staff content.
"If you're going to be in the retail industry — and I can't speak for every bike shop — our shop is equipped best for quality of life," said Minks, whose locations are in Bloomington and Hopkins.
"We're a family ourselves. We understand that. We don't make our employees work until 10 o'clock at night. The latest our store hours have ever been is 8 p.m. And this year we're not even doing that because we couldn't find enough coverage. So we're closing at 7 p.m."
That kind of environment is not restricted to the retail side of the business. "We try to treat employees like family," Kent's Kamler said.
Patrick McGinnis, president of HLC North America, agreed that work environment is especially critical nowadays in attracting and retaining employees.
"We can only pay so much because we have obligations to the business and shareholders, but what we can do is create the best possible environment and really care about your employees as best as you can and put their families first," McGinnis said.
For sure, the days of shops relying strictly on perks, like industry discounts and handling the latest high-tech gear first, won't be enough to entice candidates. Building a loyal and efficient workforce has gotten more difficult and expensive, as one industry employer who did not want to go on the record concluded.
"You have to pay more; you have to include more benefits. We've had to up our game in the benefit area and salary, and allow flexibility."
That's been a strategy that's helped Jim Mincher maintain a stable workforce for the past couple of years. Mincher, who owns Two Wheeler Dealer in Wilmington, North Carolina, hasn't had anybody leave in two years and has even added to employees in the past year.
"Pay well and treat employees right, and they stay with you," said Mincher, who employs 22 and has been in the industry for 47 years. "Have fun at work, but take it seriously. Keep your customers happy also."
And when it comes to grooming managers to provide long-term career opportunities, the retail side of the industry struggles. "Just being able to try and find management to grow our business has been difficult," Minks said. "We've tried out a few managers or we had some people we thought could grow into management that ended up leaving for multiple reasons. Just getting people in the door who can see the bike industry as an industry that has a ton of potential" has been difficult.
Proper training is one of the most important facets of employee success and retention, Phibbs said, adding owners shouldn't view previous bike experience as the be all and end all. "There are plenty of bad people who have good experience. The days of putting in an ad and having a guy and gal show up who understands the bike market are probably over. But that doesn't mean you can't hire somebody who did fashion, or who did automotive, or a million other things, and then train them."
Mihalick's company has become more agressive in its efforts by adding a recruiting team to connect job-seekers to positions fitting their qualifications. "And that's producing results," he said. "People are having the carrot put directly in front of them."
Phibbs offers frank advice to retailers in search of good job candidates.
"Sitting there and complaining and talking to the media and talking to your buddies how it sucks to be you isn't going to get anyone anywhere," he said. "Because new employees will pick that up quicker than anybody. You're an entrepreneur. Figure it out."
