Are you or your family hoping for jobs in the retail industry? When you’re shopping do you prefer to deal with knowledgeable sales people, not newly-installed equipment?
Unfortunately, with the new tax law, there will be fewer jobs, less personalized services and more automation in the retail industry.
- Incentives for Layoffs: That’s because the law encourages retail chains to replace workers with machinery. Companies now can write off the cost of new equipment immediately, rather than over an extended period, as in the past. Moreover, with corporate tax rates cut from 35 to 21 percent, companies can keep a larger share of their savings from automation. The potential payoff: windfalls of 20 percent or more from substituting equipment for employees.
- The Larger Challenge: Last year alone, 66,500 American retail jobs were lost, part of a larger trend that cost about one in seven retail jobs over the past ten years. As many as 7.5 million retail jobs, including cashiers, salespeople and shelf stockers, are at risk, according to the Cornerstone Capital Group. Online shopping – the “Amazon effect” – has been a major factor in the loss of these jobs.
- Upgrading or Downsizing? As the Korn Ferry Hay Group foresees, 60 percent of the surviving jobs will offer new roles with greater responsibilities. Remaining workers will need to provide what machines can’t: sophisticated personalized services. So, instead of downsizing and layoffs, smart retailers should be offering higher pay, more training and retraining and greater respect for workers on the job – whatever it takes to recruit and retain employees.