Holiday seasonal hiring expected to slow as shopping kicks off with Black Friday
Seasonal Hiring for the Holiday Season Expected to Slow Down
Get ready for a different kind of holiday shopping experience this year. Seasonal hiring for the holiday season is projected to be slower than last year, indicating a potential cooling off of the labor market. As the Federal Reserve maintains high interest rates, retailers across the country are preparing for a less intense surge in hiring compared to previous years.
Typically, retailers hire additional staff ahead of the holiday shopping season, which kicks off with Black Friday and extends through December. The increase in shoppers buying gifts and groceries for holiday feasts requires more workers to handle the demand.
Lower Expectations for Seasonal Hiring
According to the National Retail Federation, employers are expected to add between 345,000 and 445,000 seasonal workers to their payrolls, a decrease of up to 40% compared to the peak in 2021. Outplacement services firm Challenger, Gray, and Christmas predict even fewer seasonal positions, with an estimated 410,000 retail jobs added in the fourth quarter, the lowest number since 2008.
Andrew Challenger, head of sales and media at Challenger, Gray, and Christmas, explains that companies, especially retailers, won’t be able to pass on increased labor costs to consumers as easily due to slowing inflation. This could result in more job cuts rather than new positions. Jeffrey Roach, chief economist for LPL Financial, believes that the average consumer will also notice the trend, with less customer support and longer lines expected.
Factors Influencing the Slowdown
Roach acknowledges that the U.S. experienced an unusually robust year economically, partly due to pent-up demand and “revenge spending” as COVID-19 restrictions eased. However, he believes this trajectory is unlikely to continue. While there are some early indicators, such as rising credit card balances and delinquencies, suggesting potential challenges, Roach emphasizes that there is still support for a soft-landing narrative.
Another factor impacting seasonal hiring is the rise of online shopping, which was already growing before the pandemic. The convenience and attraction of online buying may lead firms to hire fewer seasonal workers. Michael Collins, interim director of the School of Resort and Hospitality Management at Florida Gulf Coast University, notes that employers will still face difficulties filling open positions due to the acute labor shortage, particularly for front-line entry-level roles.
Changing Shopping Patterns
Bankrate research reveals that holiday shoppers are starting earlier, with half projected to begin shopping before the end of October and a quarter even starting before the end of September. Retailers are also offering deals to encourage early shopping. This shift in shopping patterns reduces the urgency for a massive surge of seasonal workers during a specific timeframe, further contributing to the slowdown in seasonal hiring.
Record Holiday Spending Expected Despite Slower Hiring
Although seasonal hiring may be slower, holiday spending is still anticipated to reach a record high this year. The National Retail Federation predicts a 3% to 4% increase in holiday spending compared to last year, with shoppers estimated to spend up to $966.6 billion in November and December. This growth aligns with pre-pandemic trends, which saw an average annual increase of 3.6% in holiday spending from 2010 to 2019.
However, this year’s shopping season is expected to be a slowdown compared to 2022’s robust 5.4% growth and the extraordinary rebound years of 2020 and 2021, which saw increases of over 9% and 13.5%, respectively.
James Bailey, a professor at George Washington University’s School of Business, warns that falling below the projected 3% to 4% increase would be a concerning sign for the overall labor market and the state of the economy.
Get ready for a holiday season that may be different from previous years, with slower seasonal hiring but still anticipated record-breaking spending.
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What challenges could retailers face as a result of the projected slowdown in seasonal hiring, particularly in terms of managing the holiday rush with limited staff?
To fewer people visiting brick-and-mortar stores, ultimately resulting in a reduced need for seasonal employees. With the ongoing threat of the Delta variant and the possibility of further restrictions, consumers may opt to shop online for their holiday needs instead of risking exposure in crowded stores.
In addition, the supply chain disruptions and labor shortages that have plagued various industries this year could also contribute to the slowdown in seasonal hiring. Retailers may struggle to maintain sufficient inventory due to production delays and shipping challenges, limiting the need for additional workers.
Implications for Job Seekers and Retailers
The projected slowdown in seasonal hiring has implications not only for job seekers but also for retailers themselves. Job seekers who rely on seasonal employment for added income during the holiday season may find it more challenging to secure temporary positions. With fewer job openings available, competition may be fierce, and candidates will need to stand out to be considered for these limited opportunities.
For retailers, the decrease in seasonal hiring could mean a potential strain on existing staff. The surge in holiday shoppers and increased demand for customer service could stretch existing resources, leading to longer wait times and diminished customer satisfaction. Retailers may need to find creative solutions to manage the holiday rush with limited staff, such as leveraging technology or optimizing scheduling practices.
Conclusion
The anticipated slowdown in seasonal hiring for the holiday season suggests a shift in the labor market’s dynamics. Factors such as inflation concerns, the rise of online shopping, supply chain disruptions, and labor shortages all contribute to this trend. Job seekers may face increased competition for limited seasonal positions, while retailers may need to find innovative ways to manage the holiday rush. As the holiday season approaches, it will be interesting to observe how these changes impact the shopping experience and the overall economy.
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