Finding qualified workers emerges as the number one problem for small business owners – worse than even taxes and regulations, if you can believe it. Of the business owners surveyed, 54% report having few or no qualified applicants to fill open positions. This couldn’t come at a worse time for the retail industry, which is desperately struggling to differentiate itself from cheap e-commerce.

Despite growing labor force participation, the retail industry is still reporting shortages due to a number of factors:

• Low unemployment: Although a healthy sign for the economy, the 17-year low unemployment rate makes it harder to match workers with job openings. Retailers report that it’s taking 55% longer to fill positions and they’re receiving 58% fewer applicants. On top of that, 62% report a decreased quality of applicants.
• Competitive Pay: Since 1990, hourly wages for retail workers have risen less than 9%, while overall workers in the private sector have seen an 18% increase. This may be encouraging retail workers to look for better jobs elsewhere. Recent data shows the number of retail workers leaving their jobs is the highest it’s been in a decade.
• Job Hopping: Around 42% of job seekers change jobs at least every five years. Jobvite has coined this the age of the “Hyper-Hopper,” a time where workers are switching jobs faster than ever before. “It makes sense – this demographic is still exploring their career paths and might test out different jobs to gain a more diverse skill set,” said Rachel Bitte, chief people officer at Jobvite. “And if an employee isn’t earning as much money to begin with, there is only more to gain in exploring other options.” Job hopping is a real threat to retailers since they struggle to retain employees due to of low pay and poor benefits, leaving them in a constant state of hiring.
• Rising Cost of Housing: The national average of housing prices has accelerated since hitting a low in 2015. In Outdoor Retailer’s survey, 42% of respondents said housing poses more of a challenge for staffing now than it did five years ago. This could explain why freelancers make up 35% of America’s workforce, since freelancing enables employees to make money remotely and avoid being forced into high-priced competitive housing markets.

Although things look bleak for the industry, retail can rise from despair if it finds the incentives to hire and retain an increasingly dynamic workforce. But if retailers fail to find a solution to filling empty seats, e-commerce may finally put an end to brick and mortar retail.