Slowing Recovery Threatens Holiday Hiring

The latest bumps on the economy’s road to recovery could not have come at a worse time for holiday job seekers.  While retailers are still holding out hope for decent holiday sales, the slowdown is likely to dampen expectations and reduce demand for extra seasonal workers, according to the employment experts at global outplacement consultancy Challenger, Gray & Christmas, Inc.

In its annual holiday hiring forecast, Challenger predicted that seasonal job gains in the retail sector will be about the same or possibly lower than a year ago, when employment grew by 627,600 from October through December.

Last year’s retail employment gains increased a better-than-expected 27 percent from the 495,800 seasonal workers added in the final three months of 2009.  In 2008, holiday hiring fell to a 26-year low, as retail employment grew by just 324,900, the worst showing since 1982, when seasonal hiring totaled 259,500.

“The retail environment has improved significantly since 2008, when the recession was at its worst.  However, retailers are seeing several signs that consumer spending is dipping just as they are beginning to make decisions about how many workers to add for the upcoming holidays.  This does not bode well for job seekers,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

“It would be surprising if holiday hiring exceeded last year’s level.  Employment gains most definitely will not reach pre-recession levels, which averaged around 720,000 extra seasonal workers added from October through December.  Most indications so far point to about the same level of hiring as last year,” he noted.

Optimism among retailers took a hit last week with the Commerce Department’s latest report showing that August retail sales were unchanged from the previous month and July sales were adjusted downward.  It was the weakest report in three months.

Retailers undoubtedly are hoping that consumers are simply saving their money for bigger spending over the holidays.  The International Council of Shopping Centers is forecasting a 3.5 percent increase in retail sales for November and December.  That would be lower than last year’s better-than-expected 4.4 percent increase, which was the biggest holiday sales gain since 2006.

Even if retailers foresee strong sales, it may not result in increased hiring.  A recent survey of majorU.S.retailers by management consultants at the Hay Group found that 68 percent expect sales to be higher than last year.  Yet, the same percentage (68 percent) plan to hire the same number of seasonal workers as last year.  About one-fourth of respondents said they plan to reduce the number of seasonal hires.

Last week, Toys “R” Us announced that it would hire about 45,000 seasonal workers this year, the same number of extra workers for the holiday season as last year.  Likewise, Discount Shoe Warehouse, which enjoyed double-digit sales gains in the quarter ending July 31, reports that it is not planning an increase in seasonal hiring this year.  Instead, it plans to give existing workers more hours.

“For most retailers, there is not much incentive to add more workers than a year ago.  Many are dealing with higher costs related rent, energy and wholesale prices.  These are increased costs that they are loath to pass along to consumers, so it simply does not make sense to hire more workers that will eat into the already-shrinking profit margins,” noted Challenger.

An additional factor that may suppress increased hiring is the fact that retailers are heading into the holiday season with about 160,000 more workers than a year ago.  As of August, retail employment totaled 14,582,200, up from 14,422,600 at the same point a year ago.

“Of course, none of this should discourage holiday job seekers from conducting a search, starting now.  Even if seasonal hiring is flat, we are still talking about an extra 620,000 being added to retail payrolls, beginning in October,” said Challenger.

“Furthermore, there is constant churn in the retail industry.  It has some of the highest turnover rates of any industry.  You may walk into a store one day and they are not hiring.  Walk in the next day and they may have had an employee quit and plan to replace him,” said Challenger.

According to Challenger, the best opportunities for seasonal job seekers will be at the large discounters like Target and Wal-Mart, which will be heavily favored by cost-conscious consumers this holiday season.  However, job seekers may have to look beyond the sales clerk positions for available spots.

“The big box stores need extra workers on the floor, but they also need extra workers in their shipping facilities and overnight stocking positions.  Opportunities also exist outside of retail, in areas like catering and with shipping companies such as UPS and FedEx,” said Challenger.

“Job seekers should also be prepared to be on standby.  In other words, retailers may conduct interviews in September and October and prepare a list of hirable candidates that they will call only when it becomes obvious that more manpower is needed.

“When job seeking in retail or any other sector, it is important to remember some key interview guidelines: dress appropriately, be on time, show enthusiasm and follow up.  According to one hiring manager, the biggest mistake job applicants make when seeking a holiday position is “demanding a specific schedule from prospective employers.”

Temporary workers must be prepared to be flexible, whether it is hours or type of work.  Either can vary as the holiday season progresses.

“Holiday job seekers should start their search by contacting friends already working in establishments that could need holiday workers.  You should also target establishments of which you are a frequent customer.  If there are certain retail outlets where you would prefer to work, start going there when business is slow and try to make a connection with a manager or assistant manager.  The key is separating oneself from the pile of applicants the store will see between now and Halloween,” Challenger concluded.

# # #

 

JOBS ADDED IN RETAIL TRADE

October, November, December, 1999-2010

 

Oct

Nov

Dec

TOTAL

Job Growth Compared to Previous Year

1999

172,300

369,000

308,100

849,400

8.0%

2000

143,700

393,800

250,600

788,100

-7.2%

2001

95,700

352,000

137,600

585,300

-25.7%

2002

125,900

350,400

193,300

669,600

14.4%

2003

145,100

305,000

189,900

640,000

-4.4%

2004

157,800

371,800

180,600

710,200

11.0%

2005

122,300

392,700

196,400

711,400

0.2%

2006

150,600

427,200

169,000

746,800

5.0%

2007

87,900

465,400

167,500

720,800

-3.5%

2008

38,600

213,500

72,800

324,900

-54.9%

2009

45,100

317,000

133,700

495,800

52.6%

2010

144,100

332,700

150,800

627,600

26.6%

AVERAGE

119,092

357,542

179,192

655,825

 

Source: Challenger, Gray & Christmas, Inc., with non-seasonally adjusted data from the Bureau of Labor Statistics

2 thoughts on “Slowing Recovery Threatens Holiday Hiring

  1. Pingback: Seasonal Jobs: Who’s Hiring For The Holidays? | Career 4 You

  2. Pingback: Seasonal Jobs: Who’s Hiring For The Holidays? | Better Jobs Advice

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