Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
E-retailers hire workers for their busy seasons with an eye toward finding those worth keeping.
Months before most Halloween partygoers commit to the Jedi master outfit, the Captain America uniform or the naughty nurse, hiring officials at costume e-retailer BuySeasons Inc. will start seeking the best candidates to fill 1,700 seasonal warehouse and call center slots. Some of those workers will be referrals from current employees, says David Karst, vice president of human resources. Roughly a third will likely be veterans of the e-commerce operation's temporary labor force, already having helped the Wisconsin web merchant meet its Halloween demand in years past.
What won't happen is BuySeasons farming out its seasonal staffing work, whether to a vendor focused on warehouse management or a staffing agency. "We do all screening, recruitment and evaluation on our own," Karst says. "We can get a better work force. We kind of have it down to a perfect science."
Stubbornly high unemployment means e-retailers have plenty of workers to choose from. But retailers say they have to be more selective than in the past because online fulfillment and customer service has become more computerized and complicated as retailers entice shoppers with such features as flash sales, buy online, pickup in store programs and later delivery deadlines.
"We can't hire individuals with the same mindset today that we did 10 years ago," says Chip Edgington, executive vice president of operations for Redcats USA, which owns such brands as The Golf Warehouse, The Sportsman's Guide and OneStopPlus.com, and employs approximately 600 permanent fulfillment workers during the year. That headcount typically swells by at least 10% during peak seasons, which for Redcats is both in the fall and the spring.
That's not to say those peak-season workers have to claim Rhodes scholarships on their applications, only that they can quickly read packing slips and order tickets, and be comfortable with tasks that might include working with voice-command systems or expensive cranes. "It's not the warehouse of yesterday," Edgington says. "You need to have the skill set and capacity to come in and work in a highly technical environment."
But much of the seasonal hiring is still for warehouse work, which can be heavy and tedious. Turnover remains high, even as the jobless rate remains above 8%. As e-commerce grows, and some of the biggest retailers add distribution centers and hire thousands of workers at a time, a growing number of web retailers are taking a close look at the people they hire for peak seasons, hoping to find some that will be worth offering permanent employment.
Amazon's hiring binge
Still, there's plenty of work just for the holiday person, especially at the growing number of warehouses operated by the web's leading retailer, Amazon.com Inc. Amazon hires thousands of workers for its fulfillment centers across the county to help with the load of the holiday season. Some of the workers have been laid off from other companies, while others are semi-retired and live in their recreational vehicles during the few months of seasonal work, creating a new type of migrant labor camp full of RVs.
Local officials welcome the crowds. "These [workers] are spending money. It's quite an economic impact. It's like having a three-to-four month convention in our community," says Ron McMahan, executive director of the Campbellsville Taylor County Economic Development Authority in Kentucky. The agency has worked with state parks officials to make upgrades at local campgrounds to better accommodate the RV workers—often called "work campers." Private developers are reluctant to build enough sites to handle the short-term spike between September and December, he says. "And even with the temporary camper program, Amazon still hires as many local temporary workers as they can get," McMahan adds.
Such work for Amazon typically pays between $10 and $13 an hour, according to job listings from staffing agencies that help the e-retailer meet its peak season labor needs. Besides staffing agencies, Amazon also finds seasonal workers via ads with such companies as Workamper News Inc., which operates print magazine and web sites for the RV migrants. Workamper offers workers a lifetime membership for $397 that includes discounts on a range of products as well as subscriptions to its publications, and calls its worker-readers "members."
Thousands of Workamper members have taken seasonal jobs with Amazon over the five years that the e-retailer has used the company to find temporary labor, says Steve Anderson, Workamper president. In fact, he says, Amazon hires more Workamper members than other employers, including government agencies. "The money that folks make during the three to four months they work for Amazon will provide the additional funds they need for coming travel and expenses," he says. But the jobs are demanding, largely because the warehouses are so large, he says. "It requires that you be on your feet and many will walk many miles each day as part of their job assignment."
Amazon increased its permanent workforce by 73.1% last year, closing the year with 65,600 employees—with most of the new hires in operations and customer fulfillment. Amazon declined to comment for this story. It seems likely Amazon will continue to hire, as the world's largest e-retailer has already announced plans to build 15 fulfillment centers this year to back up its extensive free and fast shipping offers.
The main driver of that hiring is, of course, sales. Amazon's revenue in the fourth quarter of 2011 hit $17.43 billion, up 34.6% from $12.95 billion in the fourth quarter of 2010. During that same period, Amazon's spending on fulfillment reached $1.66 billion, up 52.3% from the same period the year before, largely a result of Amazon providing free two-day shipping to consumers who pay $79 for an annual subscription to its Amazon Prime service. Overall, U.S. e-retailers sold $49.7 billion worth of goods to U.S. consumers in the fourth quarter of 2011, up 14% from the 2010 holiday shopping season, according to web measurement firm comScore Inc.