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The New Gray Collar: The Emerging Workforce Powering eCommerce in America

Inside of a warehouse with Working in America text overlay on image

As traditional retailers lose business to the accelerating dominance of e-commerce, we’re witnessing a significant change in the workforce. In this issue of Working of America, we look at the types of jobs and people that make up this growing gray collar workforce in America, and the impact this trend will have not just on the retail, shipping and production industries, but on the nature of work itself.

Retail is dead, long live retail

Few storylines seem to get as much attention in the press than the decline of retail. Each month we read of more malls closing and retail shops shuttering on Main Street. But there’s another storyline gaining momentum, as illustrated in a May 2017 Bloomberg analysis. Noting recent industry trends, the piece claims, “Even though you hear headlines like retail is dying and the robots are coming, there’s still a lot of things that need human touch points. It’s a dogfight over good employees.”

In spite of the doomsayers, brick and mortar stores will always be with us, and we know that these retailers will continue to require an able workforce. But we also know that big box traditional retailers and forward-thinking brands themselves are rapidly transforming their businesses not simply to become retailers with online sales, but as fundamentally re-engineered e-commerce platforms in need of full-fledged logistics and distribution plans.

E-commerce everywhere

As traditional retailers lose foot traffic, market share and stock valuations to the e-commerce category over the past several years, most observers cite a prime cause: Amazon. But the simplistic ease of that explanation was confounded this spring when Amazon announced its nearly $14 billion deal to acquire Whole Foods — along with their almost 400 retail stores. Now the picture seems just a little less clear in the arms race for customer business and purchase basket size.

When viewed as a whole, the retail sector remains one of the biggest job categories in America, with the vast majority of those workers still working in bricks-and-mortar stores. Industry analysis like the Bureau of Labor Statistics chart below shows the biggest growth coming from e-commerce, and we know from the people we place that the pay and skills levels required are higher in the e-commerce-related world than in the bricks-and-mortar:

Infographics of how e-commerce is growning faster and pays more in wages.

As the drumbeat news of automation replacing traditional retail grows louder, opportunistic retail workers worried about job loss can actually take heart — these trends suggest a net gain of e-commerce-related jobs opening up, often with higher earnings than the traditional retail jobs they’re replacing.

Some analysts go so far to suggest that the e-commerce boom offers a potential economic antidote to years of low productivity growth and income stagnation. “If this new pattern continues, it will raise real wages across the economy and rejuvenate the middle class,” said economist Michael Mandel of the Progressive Policy Institute in Washington.

The evolution of retail

E-commerce’s ascent is driving rapid and surprising evolutionary change in the retail marketplace. Traditional retailers like Kohl’s and Macy’s are being joined by major brands like Nike and Burberry in becoming e-commerce brands in themselves.

According to Justin Sigg, director of business operations at Aerotek’s Phoenix office, this presents as many challenges for the rapidly transforming companies as it does opportunities for the growing gray collar workers. “Many of these traditional retailers and brands don’t have e-commerce baked into their business DNA like the native e-commerce companies do. One of our added values to these brands and retailers is our deep experience staffing the largest e-commerce companies. In some cases, we understand their needs from a business and staffing standpoint sometimes before they do.”

Tony Corpuz, director of Aerotek’s professional services division, agrees. “An e-commerce company requires many different types of skills, all working in close coordination. Everyone from frontline customer care call-center workers to warehouse crew — pickers, packers, forklift operators, shipping specialists and machine techs. In many cases, these workers are using increasingly sophisticated tools as part of their job. With increased technical complexity, comes increased value of workers, who see this reflected in a higher hourly pay than they’d make in traditional retail.”

E-commerce and the gray collar workforce

The Dallas News provides striking evidence of an emerging middle-class workforce connected to the growing e-commerce category — or “digital retail.” They suggest an increase in new jobs creation across many regions of the U.S. It highlights the data revealing, “increases in fulfillment center jobs in heartland states hit worst by the manufacturing downturn, showing those workers were getting a healthy premium” in increased wages.

The article compares the new e-commerce-industry jobs with the offline retail jobs it replaces, calculating, “the e-commerce segment paid an average of about $43,000 annually in Texas, compared with an average of $31,000 in brick-and-mortar retail. Nationwide, the premium was slightly lower but still significant.” The piece goes on to show a corresponding increase in workers compensation, being rewarded with being more productive, with “consumers flocking to companies with lower prices and better service.”

Research published by The Progressive Policy Institute this past spring, explicitly claims this represents an emerging new middle class in America. They suggest this is the result of the accelerating “digital economy,” with companies like Amazon leading the charge. In addressing the net gain or net loss jobs issue, their findings are unequivocal and deeply encouraging for anyone worried about the future of work in America. They found that, “the e-commerce sector added 355,000 jobs from 2007 to 2016 — more than enough to compensate for the 51,000 jobs lost in the general retail sector,” during the same period.

From our vantage point, this data offers more proof points for an emerging gray collar workforce, something we’ve been seeing across a host of industries and jobs categories outside of e-commerce. Industries like manufacturing, life sciences and traditional skilled trades. These new gray collar workers aren’t the traditional white collar knowledge workers, nor are they the traditional trades associated with blue collar work. The new gray collar workforce of people represents a uniquely diverse mix of temperament, skills and know-how.

Who are these people, and what do they do? The Bureau of Labor Statistics defines the e-commerce sector to include the “electronic shopping” industry and “general warehousing”. Experience tells us this includes people working as pickers and packers, shipping specialists, fulfillment managers, customer care representatives, data processors and even the technicians responsible for keeping all the equipment, robots, hardware and software operating at optimal capacity 365 days a year.

People-powered production

When it comes to the general warehousing category of workers, Matt Naples is a specialist. Matt recruits warehouse and production workers serving Aerotek’s e-commerce clients in the New Jersey region. We asked him what sorts of people gravitate towards pursuing the ever- increasing job opportunities in this critical area of the e-commerce jobs market.

“It really runs the gamut. We have high school grads, college students taking a break, moms coming back to the workforce and fathers of five all taking advantage of the demand for warehouse production roles. We just placed a woman whose mom and dad had been warehouse workers and so that’s a line of work she knows well. I’m interviewing a woman later today who is a sophomore in college, and not really sure what she wants to do with her life. But she’s done warehouse work before and so she’s planning on coming back to warehouse work full-time while continuing school at night. Like I said, the range of people populating this world really varies.”

Robot techs and multilingual workforces

Nathan Coin, manager of Aerotek’s commercial division, leads much of the strategy when working with some of the largest e-commerce companies. Nathan told us, “in addition to high demand for labor, we are seeing additional opportunities for technical maintenance as automation is increasing in warehouse and production environments requiring people to program, manage, monitor and maintain the machines. We’re seeing an emerging skill-set in high demand, these robot technicians and maintenance professionals. They’ll often work during the third shift when, in some cases, the warehouses and shipping centers are less hectic. The thing about these jobs is that there are more technical and so they pay better than the traditional jobs which the machines these new technicians work on replaced.”

Nathan’s colleague Sara Staggs, director of commercial divisional operations, told us about another trend she sees in this emerging American gray collar workforce. “We’re seeing companies building shifts and teams of ESL, or English as a second language, contractors. Whether these are forklift operators, machine techs, warehouse production workers or even customer service representatives (CSR), companies are recognizing the productivity benefits of accommodating this growing workforce by building these teams of Spanish language speakers.”

Crunch time — year-end working in America

Each year, around mid-February the industry begins preparation for the year-end rush. Justin Sigg explains how this can complicate things for the increasing number of companies competing for retail market share in this make-or-break period of year-end. “When you look at a job like customer service representative, it’s complicated even more by the healthcare open enrollment period coinciding with holiday shopping and the year-end rush. And in that job category alone, the skills required of the new generation of customer care reps are becoming increasingly sophisticated. “

For the 2016 year-end holiday season, companies like UPS hired almost 100,000 temporary workers to accommodate their crunch-time, “offering bonuses and higher wages ... in some parts of the country … amid tighter labor markets.” According to Bloomberg, during its year-end rush UPS, “will add package handlers, drivers and driver helpers ahead of its busiest season this year, which starts in November and continues through January. While the positions are temporary, more than 37 percent of handlers were hired for permanent jobs from 2012 through 2014.”

Our work with some of the largest retailers, e-commerce platforms and distribution businesses in America bears this trend out. One of the benefits to many of the contractors we place during this seasonal crunch time is the opportunity to use a temporary contract as an audition period for longer-term employment. According to this Fortune article from 2016, “Amazon [planned to] hire more than 120,000 seasonal workers in the United States for the holiday season, 20 percent more than last year, highlighting the growing threat the e-commerce giant poses to traditional retailers, [with] more than 14,000 seasonal positions … to transition to regular, full-time roles after the holidays.”

Justin offered some insight about this seasonal crunch-time from the company perspective. “The jobs market in many regions is tight to begin with, and when year-end hiring surges come around, all these companies are competing for the same workforce. It can make it difficult to scale fast enough with quality contractors to fill the growing need. Every year, crunch-time seems to start a little earlier.”

Spotlight on a skill — customer care specialists

With the jobs economy transformed by the juggernaut of e-commerce, the role of customer care is emerging as the new frontline of sales, support and service for many industries. We spoke with several Aerotek representatives to better understand what sort of worker is attracted to and excels at this new professional calling.

Kenzie Church and Lauren Hoeschen are Aerotek recruiting managers that specialize in placing customer service representatives in Minnesota. We asked them what makes this new generation off CSRs unique. Kenzie said, “We work with some of the largest healthcare providers and insurers in the U.S. Recruiting for these companies led me to discover a group of people who just have a passion for healthcare. These people are looking to build a career in healthcare, and getting into the business through the customer care role is becoming an attractive path.” Lauren agreed and added, “Working as we do with such renowned brands in the healthcare industry, we often find young professionals seeking to add a big name to their resume, even if it’s for a limited contract period of work.”

Kenzie described the changing nature of the customer service job and the enhanced skillsets companies are looking for in staffing a role that has evolved greatly since the call centers of just a few years ago. “Companies are looking for people adept at using contact management software, word processors and other technology systems. Increasingly, tools like chat, email and even social media channel management are part of the job.”

Kelly Eisele, an Aerotek director of business operations working closely with these new professionals agrees. “Our company partners know that sometimes they are one bad social post or tweet away from a severely damaged brand.The customer service rep is literally the face and voice of the brand for an increasing number of consumers. A customer’s first interaction, sometimes their only interaction, is with a customer care agent on the phone or in a chat session. There’s a lot riding on positive outcomes and what we call ‘first call resolution without escalation’”.

“The healthcare companies we work with are looking for people with very strong interpersonal skills, since they represent the brand.” Kelly added, “It’s also why many of our clients look to their customer service ranks as potentially strong candidates for jobs across the company. They recognize the value in a staff that understands the business through the eyes of the customer first and foremost.”

Tony Corpuz points out “the role of the customer service rep has changed drastically in the past few years. Our clients are finding it hard to find these special people. The CSR of today needs to be able to navigate multiple media platforms, often all at once — chat rooms, bots, social media apps, email. And the smart companies are realizing that this new CSR, who traditionally was treated as a cost center, can now serve in a revenue-generating role. That’s a huge shift in the nature of the job.”

Career building in a gray collar world

The term gray collar is indistinct and very new. Even Wikipedia isn’t certain how to describe the “gray collar” workers of America. They suggest this new cohort is comprised of, “skilled technicians, typically someone who is both white and blue collar, an example of this kind include information technology workers. They are principally white-collar, but perform blue-collar tasks with some regularity, such as engineers...”

Although much of their description agrees with our growing appreciation for this emerging workforce, experience has shown us that this class of workers is decidedly diverse when it comes to the skills they possess and the jobs they’re asked to perform. We heard several themes emerge from our conversations with Aerotek client managers and recruiters that suggest this emerging workforce will become important to U.S. businesses and the overall economy in ways not immediately apparent. What seems clear is this — the increased technical nature of their work, the focus on workforce optimization, the empowerment of direct customer contact and the opportunity to learn the business from the ground up all create opportunities and career pathways for the more ambitious among this growing workforce of gray collar workers in America.

With the e-commerce category leading as the disruptive driver of growth powered by this new workforce, industry analysts and economists are suggesting that the future of the white collar workforce will look different as well. Companies are recognizing that home-grown talent, nurtured and promoted from the growing ranges of gray collar workers, can bring to management roles a dee per sense of the customer, the ever-changing marketplace as well as the business’s products.

Whatever color your collar is, we’d love to become your career growth partner. Update your free Aerotek careers account today and search our available opportunities across a multitude of job categories, skills and industries.