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Job seekers have reason to cheer; retailers may need to amp up payrolls for the holidays

By John A. Challenger, CEO Challenger, Gray & Christmas, Inc. Modified: October 29, 2010 at 11:08 am •  Published: October 4, 2010
Two consecutive months of sales gains may provide just enough confidence to trigger increased seasonal hiring by the nation’s retailers this year. However, the number of holiday workers added to retail payrolls in October, November and December is still likely to fall short of pre-recession levels.

In its annual holiday hiring forecast, global outplacement consultancy Challenger, Gray & Christmas, Inc., said that retailers may continue to be cautious when it comes to staffing, knowing that the economy is at a fragile stage of the recovery and could turn on a moment’s notice.

Last year, retail payrolls grew by 501,400 workers in October, November and December, according to non-seasonally adjusted data from the Bureau of Labor Statistics. That was a 54 percent increase from 2008, when holiday hiring fell to a 22-year low of 324,900 extra holiday helpers.

This year we expect to see further gains in seasonal hiring, but it probably will not achieve the levels we saw in 2006 or 2007 when retailers’ holiday payrolls grew by 746,800 and 720,800, respectively. There is still a lot of doubt about the sustainability of this economy.

Retailers do not want to be caught with too many workers at a time when many of the fundamentals needed for strong consumer spending remain a little shaky. There are still nearly 15 million Americans out of work and many have lost their homes or are struggling to hang on to them. This does not bode well for heavy holiday spending.

Challenger does see some reasons for optimism. Job-cut announcements by retailers have fallen 65 percent from a year ago. Retailers announced 89,242 job cuts between January and August 2009. This year, the eight-month total is down to 30,805.

Additionally, while retail payrolls are still lower than they were a year ago (14,463,000 as of August, compared to 14,497,000 in August 2009), a recent hiring surge resulted in a net gain of 329,400 new workers since February.

Meanwhile, retail sales increased 0.3 percent in July and 0.4 percent in August. The numbers were even better when car sales were removed from the mix, with purchases climbing 0.6 percent. Spending at clothing stores rose 1.2 percent.

The stronger sales figures heading into the holidays could boost seasonal hiring above last year’s activity. However, like a year ago, the hiring surge may come in November and December, as retailers wait to see how holidays sales are going before adding extra workers.

This should not discourage holiday job seekers from starting their search now.

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