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Seasonal Hiring Could Stay Slow As Retailers Remain Cautious

Retail conditions remain 'iffy'

By James Limbach
ConsumerAffairs.com

September 19, 2009
Better-than-expected back-to-school sales results may lift the spirits of many retailers who were probably anticipating a bleak holiday season.

However, more optimism may not necessarily lead to increased seasonal hiring by cautious retailers, according to annual holiday hiring forecast released Challenger, Gray & Christmas, Inc.

"Holiday hiring might improve slightly over last year, but only because 2008 saw the lowest seasonal employment growth in nearly 20 years," said John A. Challenger, chief executive officer of the global outplacement consultancy. "With millions of Americans out of work and many more simply cutting back on all discretionary spending, few retailers will take the risk of eating into slim profits with extra workers."

Last year, retail employment grew by just 384,300 from October through December, according to non-seasonally adjusted data from the Bureau of Labor Statistics. That was down nearly 50 percent from 2007, when retailers added 720,800 workers during the holiday months. The 384,300 seasonal workers hired in 2008 represent the lowest holiday hiring figure since 1989, when retailers added just 380,500 workers.

Dismal conditions

While there have been some signs that the recession may be over, conditions have remained dismal for retailers. As a result, employers in the sector have announced 89,242 job cuts through August, an 82 percent surge from the 48,971 retail job cuts recorded in the first eight months of 2008.

"However, there are some signs of hope," said Challenger. "After heavy downsizing in the first quarter, job cuts in the retail sector slowed significantly in the second quarter and are on track to be even lower in the third quarter. Additionally, the latest data on retail sales were better than expected."

The latest report from the Commerce Department shows that retail sales increased by 2.7 percent in August, after falling 0.2 percent in July. It was the biggest gain in three years. Much of the sales increase was due to robust car sales ignited by the government's cash-for-clunkers program. However, other retail categories saw improvement, including apparel, up 2.4 percent; sporting goods, up 2.3 percent; and general merchandise, up 1.6 percent.

"The stronger sales figures heading into the holidays could boost seasonal hiring above last year's meager activity. But the hiring surge may come later than normal this year, as many retailers wait to see how holiday sales are going before adding extra workers," said Challenger.

He says the good news for retailers is that if there is a need for late hiring, the labor pool is flush with qualified candidates who undoubtedly would be eager to earn some extra holiday spending money and take advantage of employee discounts.

Best opportunities

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," said Challenger. "Opportunities also exist outside of retail, in areas like catering and with shipping companies such as UPS and FedEx."

At the same time, Challenger advises job seekers to be prepared to be on standby. He notes that 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 will be needed.

Interview guidelines

When job seeking in retail or any other sector, it is important to remember some key interview guidelines, says Challenger: dress appropriately, be on time, show enthusiasm and follow up. One hiring manager points out that 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," Challenger concludes. "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 yourself from the pile of applicants the store will see between now and Halloween."

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