Small supermarket chains desperate for new staff are offering sign-on bonuses of up to $2,000

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Small supermarket chains desperate for new staff are offering sign-on bonuses of up to $2,000
A cashier works at the Cardenas Markets grocery store as a for hire sign is seen on High Street in Oakland, Calif., on Wednesday, May 27, 2020.Jane Tyska/Digital First Media/East Bay Times via Getty Images
  • Small supermarket chains are turning to sign-on bonuses to attract new hires, CNN reported.
  • Tops Markets, a northeastern chain, is offering $2,000 bonuses, and hopes to hire about 100 staff.
  • An analyst told CNN that sign-on bonuses are cheaper for companies than hiking up wages.

Supermarket chains and convenience stores are offering new hires sign-on bonuses as high as $2,000, as they scramble for staff amid the current US labor shortage.

Chains such as Ollie's Bargain Outlet, Sheetz, and Tops Markets are hoping the cash benefits will tempt new hires that can staff stores and warehouses as the US economy reopens, according to a report by CNN.

Some companies have been hiking up wages or offering education perks to attract more workers, but sign-on bonuses are popular because they're one-off payments. This makes them cheaper for employers than raising wages in the long run, Andrew Challenger, vice president at executive outplacement firm Challenger, Gray, and Christmas, told CNN.

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Read more: McDonald's franchisees blame hiring challenges on unemployment benefits and say an 'inflationary time bomb' will force them to hike Big Mac prices

"Historically, stores have not had to do sign-on bonuses," Craig Rowley, senior client partner at executive-search firm Korn Ferry, told CNN.

A late April survey by the company found that, of more than 50 major US retailers, 94% said they were having difficulty filling vacant roles, and 29% said they had introduced a sign-on bonus.

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"It tells you how needy retailers are for staff," Rowley said.

Ollie's Bargain Outlet is giving $1,000 sign-on bonuses for 200 roles at its distribution centers, CNN reported. Sheetz hopes to fill 50 jobs, offering $500 bonuses for store workers and $1,000 for shift supervisors, CNN reported.

Northeastern supermarket chain Tops Markets is offering $2,000 bonuses and needs 100 workers in its distribution center, while Wisconsin and Illinois supermarket chain Woodman's Markets is offering $1,500 bonuses to fill 600 roles.

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Amazon is hiking up sign-on bonuses, too.

One worker at an Amazon regional air hub in San Bernardino, California, told CNN that he got a $3,000 bonus for his $16.40-an-hour job, which he called "a cherry on top."

The e-commerce giant said in May that it was recruiting more than 75,000 warehouse and transportation workers across the US and Canada. It said that the jobs offered an average starting pay of more than $17 per hour, plus signing bonuses of up to $1,000. New hires get an extra $100 if they can prove that they've been vaccinated, too.

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The labor shortage is hitting industries from education and healthcare to hospitality and ride-hailing apps. The US Chamber of Commerce said that the labor shortage was holding back recovery from the pandemic, calling it a "national economic emergency," while the Federal Reserve said that the squeeze could last months.

Insider's Ayelet Sheffey reported that the labor shortage could be down to a mix of unemployment benefits, COVID-19 health concerns, caring responsibilities, and low wages. Bank of America has said it expects the job market to recover by early 2022.

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