A mixed picture of holiday hiring is emerging, even as mega-retailers such as Target Corp. aim for a record number of temporary workers to handle a hoped-for sales surge in the next two months.
Retailers added 18% more workers in October than they did during the same month a year ago, according to the U.S. Bureau of Labor Statistics. But jobs in transportation and warehouses plunged 17%, running counter to years of growth fueled by booming e-commerce sales.
Signs point to a holiday hiring season that could stagnate or even decline this year.
“It says more about the labor market than it does about the desire to hire,” said Andrew Challenger, vice president of global outplacement firm Challenger, Gray & Christmas, which suspects that traditional retailers might never again hire the numbers they once did, particularly as warehouse work becomes more automated.
Yet staffing remains the critical component for retailers of all sizes in what can be a make-or-break shopping season. Consumers said they plan to spend an average of $1,047.83 this holiday season, up 4% from last year, according to an annual survey by the National Retail Federation and Prosper Insights & Analytics.
The battle for workers is well underway. Stores at the Mall of America have put up signs and set up application tables as the retail workforce amps up from 11,000 to about 13,000 during the holidays, a mall spokeswoman said. Kohl’s began recruiting last summer to get a jump on the season and start training workers. The Menomonee Falls, Wis.-based chain held its first-ever national hiring day in October to try to land 5,000 of its 90,000 holiday workers in a single day.
Target said it’s on track to hire about 133,000 seasonal workers in stores and distribution centers, the most of any retailer to date. It will double the number of temp workers dedicated to filling online orders through curbside and in-store pickup.
Richfield-based Best Buy Co. Inc. doesn’t release holiday hiring numbers, but held job fairs with on-the-spot interview opportunities the second week of October at all stores and 11 distribution centers. The nation’s largest consumer electronics retailer said that 30% of its current full-time store staff got a foot in the door as holiday hires, one of several retailers this year promoting their record of turning temp jobs into permanent ones.
Michael’s boasts it has held onto 40% of holiday hires, while Macy’s reports that nearly a third of its store managers started with seasonal work. At delivery service UPS, where the company’s chief executive began as a part-timer, 35% of seasonal workers have been hired on for good.
It’s one way retailers are trying to attract a more loyal base, said Kimberly Schneiderman of outplacement firm Randstad RiseSmart, who urges job seekers to consider their holiday jobs as an audition.
Small independents face similar hiring dilemmas with higher stakes.
For the past few years, Aaron Meyerring, co-owner of the Electric Fetus music and gift store, has turned to loyal former employees and current workers to handle extra hours during the holiday crush. “We had to get creative over the years because we’re such a peak and valley type business around Christmas and Record Store Day in April,” he said. “It’s hard to get temps trained properly to provide the customer service we expect.”
Some are students who worked at the store during the summer and are returning for the holidays. A loyal cadre of past employees, some with ties going back 40 years, also get back into mix for the busy gift-giving season.
The holidays bring in 15% to 20% of combined annual sales at its flagship stores near downtown Minneapolis and in Duluth. “Our busy time is one week before Christmas,” Meyerring said. “We’re a procrastination destination.” At that point, it’s “all hands on deck” for the 60 employees, many of whom will get paid overtime.
Retailers are looking for any edge to attract and hang on to good workers. For the second year, Target has set aside $2 million in “team member appreciation” bonuses that will give two workers at each store a $250 Target gift card and a matching $250 charitable donation. Others are promoting brand love to woo their customers as temporary workers, Schneiderman said. Dick’s Sporting Goods is highlighting flexible scheduling and discounts of up to 25%. A job posting for a seasonal sales associate at the Mall of America blared in a headline: “Do you LOVE Victoria’s Secret PINK?”
Many are scaling back. Gap slashed its target of seasonal hires to 30,000 from last year’s goal of 65,000 and plans to offer current employees a chance to pick up more hours. Walmart, now the world’s second-largest retailer behind Amazon.com, has been using this approach for the past four years.
Noticeably missing among the seasonal-hiring announcements is Amazon. Last year, in a quest to add 100,000 seasonal workers, Amazon raised the bar on wages by bumping all entry-level wages to $15. Target is at $13 an hour; Walmart has been at $11 since early 2018.
Amazon has been hiring aggressively for several years and announced plans this summer to hire 30,000 permanent workers. Some economists suspect the online retail giant may no longer need the same level of temps.
Last year, holiday hiring fell more than 6% during the third quarter compared with the same period a year earlier, the lowest number of jobs added since 2009.
“There’s a lot of competition, particularly for warehouse and transportation employees,” Challenger said. “We’re running up against that natural wall where retailers are not able to hire the amount of people they’d like.”
As a result of the tight labor market, 86% of retailers said they experienced challenges recruiting seasonal employees last year, a survey by the hourly wage hiring platform SnagAJob.com found. More than 4 in 10 employers said they couldn’t find qualified workers and roughly the same percentage felt pinched having to compete with higher pay.
And the labor market has only gotten tighter during the past year.
The rise of digital shopping and its myriad options for consumers — including in-store pick up pickup, ship-to-store, ship-to-home and next- or same-day delivery — has opened up a skills gap, said Kim Ragan Sovell, cq/tc a marketing professor at the University of St. Thomas. Minnesota
“With e-commerce growing at breakneck speed, this is problematic,” she said. “On top of all that pressure, for brick-and-mortar retailers to attract shoppers, they have had to improve customers’ in-store experience. That’s a tough ask for seasonal workers.”
A better view of this year’s hiring landscape could come after November’s employment numbers come out. But it may also portend a broader shift in the industry.
“This year is more a function of a tight labor market and why hiring is going down,” Challenger said. “It’s possible we’ll look back and say this was the year when automation started to affect retail.”