Retailers have scaled way back on seasonal help for Christmas – RetailWire
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Amid a continued tight labor market, holiday help appears to be less in demand this year due to the souring economy.
Retailers added 162,000 workers in October, down 28 percent from October 2021, according to an analysis of Bureau of Labor Statistics (BLS) data by Challenger, Gray & Christmas.
Challenger further found that, as of the first week of November, companies had announced plans for 592,400 hires for the holiday season, a 37 percent decrease versus last year.
“Companies may be reluctant to announce their seasonal hiring plans, even if they do intend to hire, due to economic uncertainty,” said Andrew Challenger, SVP of Challenger, in a statement. “Some may not want or need to make a hiring push right now.”
Target last year reduced seasonal hires but gave more hours to current staff over the season. Walmart and Kohl’s are both planning similar tactics this year. Macy’s also plans to hire less holiday help.
Networking app Alignable’s 2022 Holiday Hiring Poll taken from mid-September to mid-October found 15 percent of mom and pop retailers hiring temporary staff, down from 32 percent in 2021. Forty-six percent say they are not hiring any workers for the rest of the year “as they tell us that they just don’t have the revenues to cover these people,” according to Alignable’s press release.
A retailer survey taken in early September by workforce management firm UKG found only 40 percent planning to hire seasonal workers, 35 percent recruiting fewer seasonal workers than last year, and a third scaling back all hiring for the remainder of 2022. UKG said, “Recession rumblings are giving retailers heartburn as they battle inventory storage costs, eroding margins, expensive employee turnover, and unpredictable consumer spending.”
A recent Accenture survey of 150 U.S. retail execs still found 57 percent taking “extraordinary” measures to address workforce challenges. These include higher pay demands, slow interviewing/recruitment processes, high attrition, training newbies and upskilling existing colleagues.
In a Forbes column, Jill Standish, senior managing director and global head of Accenture’s Retail industry group, said demands for more flexibility and meaningful work presents newer labor challenges for retail. She wrote, “For retailers, meeting these deeper needs can be easier said than done.”
DISCUSSION QUESTIONS: Is it prudent or hasty to significantly pull back on seasonal hires amid inflationary pressures and the uncertain economy? Will a reduction in hires affect the quality of customer shopping experiences during the holiday season?
18 Comments on “Retailers have scaled way back on seasonal help for Christmas”
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Given the high level of uncertainty, it’s very reasonable for retailers to be cautious about hiring plans. And while there is no question that frontline staff are key to delivering a great store experience, after two years of tumult caused by the pandemic, I believe consumer expectations for service levels have also moderated somewhat.
Retailers are very conscious of the bottom line this year, so many have moderated hiring – albeit slightly. In some ways this is reasonable as retail volumes are down and people are buying less stuff, so fewer associates are needed to serve in store and to process online orders. However these are marginal reductions so retailers have to be careful not to go overboard with cuts. There is also a change in the dynamics of hiring: more retailers are using existing staff with additional hours this holiday season which makes hiring numbers look bad, but isn’t as detrimental to overall labor hours.
This is a challenging season at the best of times, but preserving the customer’s experience and perception that a store is thriving is important. Stores that are poorly stocked with obvious understaffing make shoppers uncomfortable and quicker to look elsewhere. It’s definitely right to offer full time staff more hours, but try to right size your seasonal staff so that shoppers don’t feel frustrated.
It’s difficult to look at the breadth of retailers surveyed, and the depth of the cuts described, and conclude that everybody is being hasty. Especially when viewed against the backdrop of increased inventory levels. Fewer hands handling more inventory is an especially difficult combination for this time of the year. One can only hope that all these retailers have their eyes wide open regarding the working conditions they are creating. Once again, thunderous applause for front line retail employees everywhere.
Although automation is definitely a thing in retail and a potential rationalization for staff cuts, we’re not there yet, particularly in non-grocery categories. Hopefully, retailers will implement training upgrades that help fill the gaps.
Mistake. The main advantage physical stores have over e-commerce is the associates and their helpfulness, knowledge and just plain humanness. To have customers walking around a packed store asking, “does ANYONE work here?” is a huge mistake that will continue to accentuate the ease and convenience of online shopping. I’d recommend the opposite. This time of year, the sales cost increase will be minimized by the increase in sales and the intangibles, as in a pleasant experience.
Unfortunately, it’s prudent to scale back on seasonal hires to reflect 2022’s retail reality. Retailers are being cautious, not stingy like Ebenezer Scrooge. Reduced hiring could harm holiday shoppers’ experience if retailers miscalculate their forecasts and HR needs.
Given the economic uncertainty, retailers should be prudent in their hiring plans. I think giving more hours to existing staff is a smart move, and many retailers are moving in this direction. With inflationary pressures affecting prices in nearly every category, shoppers can already feel the pinch, and nothing is going to change this before the end of the year. Experiences will be impacted somewhat, but not in a radical way.
I think it’s a bad move. On the one hand, retailers need to bring shoppers back to stores. E-commerce is just not as profitable and the customer is a lot less “sticky.” On the other hand, they’re going to make it harder to shop by placing an early and big bet to shore up earnings?
I think it’s a bad move.
This seems like a smart move by retailers. When a shakeup like the pandemic happens, it’s worth using the opportunity it provides to change habits. In recent years, pre-holiday hiring seemed to have become more a competitive fest attempting to look more vibrant than anyone else. This just seems like a return to good business.
It is the same old song. Cut costs — cut labor.
Assuming the season will be smaller than the seasons past, it is prudent to match the labor needs with the volume. It is a difficult forecast. But if a retailer is wrong, at least be wrong in the right direction — having enough people in the store to take care of all customers.
It may be a forced choice. There is still more demand for labor than there is supply and everyone from Jeff Bezos on down seems to be urging consumers to curtail their spending. Obviously, fewer associates should logically imply lower quality service. At the very least it presents some serious challenges to in-store merchandising.
Shoppers have already started shopping and any deterioration they experience in the form of lower service levels hurts the store — not only for that specific trip, but for later visits.
I think that since the pandemic chain retailers have gotten used to smaller staffs and are continuing the trend. And it’s a problem. In many cases the sales floor is a mess, and associates are few and far between. Good luck getting help with whatever you need.
Shoppers will only put up with this for so long. After that they will find another retailer who will serve them better.
Hiring announcements can be a challenge and translate into commitments. Smart retailers don’t have to announce, especially when competitors are also being cautious. There will be last minute hiring in the event of a strong holiday season. Reduction in hires can affect holiday buying, but only if there is truly not enough staff to manage demand. Still lots of uncertainty, so we’ll have to see. Gut feel is that more in-store buyers will drive this season. There is pent up demand for shopping and I was amazed at the amount of traffic at my local mall recently.
“Companies may be reluctant to announce their seasonal hiring plans, even if they do intend to hire, due to economic uncertainty.” This has to be one of the strangest claims ever to make it to these e-pages: hey, we need to hire some people … so let’s keep it a secret!
My view is that for all the talk about maximizing the customer experience, the emphasis remains on cost-cutting. Will it ever change? Keep wishing, Virginia….
If you want to frustrate customers, make them wait a long time to get a salesperson to help or wait in a long line to check out. This “friction” will not be quickly forgotten and there is a risk of the customer leaving before they are helped, or worse, not coming back because of the bad experience. Retailers must plan for busy times and staff accordingly — or come up with an alternative self-service solution that customers use and appreciate.
Keeping staffing reasonably tighter this holiday season is understandable. But there is a fine line between planning against seasonal volume and going too far with cuts, creating a series of customer experience issues, store condition set backs and snowballing inventory issues.
Frontline employees will bear the brunt of unhappy customers who haven’t been helped. And these customers will be remember the experiences of retail brands who go too far with cuts.
Is it prudent or hasty to significantly pull back on seasonal hires amid inflationary pressures and the uncertain economy?