Wednesday, September 28, 2011

Cautious Christmas-Season Hiring

U.S. retailers are hiring fewer Christmas-season workers this year. Looking at all employers that permit seasonal hiring, only half expect to do so. Among those, one tenth expect to hire more than last year and one fourth expect to hire less. That’s according to a new Challenger Gray & Christmas survey.

It is about the same story when you ask shoppers what they will spend. About one sixth expect to spend more than last year, while one fourth expect to spend less.

Cutbacks announced so far are substantial. Toys “R” Us announced on Thursday it is hiring 40,000 seasonal workers, 5,000 fewer than last year — though most observers would agree that the toy retailer overdid it last year with its temporary stores and kiosks. This morning we learned that Best Buy will hire 15,000 seasonal workers. That’s a lot of workers, but only half as many as in 2010. Macy’s, on the other hand, says it will hire 3,000 more workers than last year.

Last year, retail stores started to let seasonal workers go as early as the first week of December, and they hope to avoid a repeat of that by hiring fewer extra workers this year. These are other reasons for employers to hire less this Christmas season:

  • Many shoppers did much of their Christmas shopping at the Borders liquidation.
  • In the future, health insurance mandates will make hiring more expensive, especially for temporary workers, so businesses want to get away from that pattern.
  • Many retailers have been overstaffed all year long, and want to give their regular staff a chance at the extra work.
  • There are some indications that the extended holiday shopping season of the last five years will repeat this year, with most purchases made before Black Friday. As shoppers adjust to avoid the rush, retailers need to follow.

There is, of course, a downside to the lighter staffing. With fewer workers, sales are lighter also, as customers can’t find what they are looking for or balk at waiting in the checkout lines.

If retailers are hiring fewer workers this fall, they are also hiring earlier than usual. “Act now if you want a seasonal holiday job,” advises the headline in the Sun Sentinel.

Online stores and warehouses cannot afford the risk of cutting back on their Christmas-season hiring, as merchandise has to get out to purchasers and stores in a timely manner. Those jobs, though, don’t require the same level of skill as a retail-store job, and may last just a few weeks.