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Americans are expected to spend upwards of $650 billion this holiday season, prompting retailers and logistics companies to invest in hiring more seasonal workers, especially in e-commerce, distribution and fulfillment center operations.
Los Angeles-based executive search and recruiting firm Korn Ferry surveyed 20 major U.S. retailers in September, representing 1 million workers, and found that 80 percent plan to hire the same amount of or more seasonal staff as they did last year.
"Despite rocky times this year with brick-and-mortar store closings at near-record levels, a relatively strong economy is expected to bode well for retailers this holiday season," said Craig Rowley, a senior partner at Korn Ferry specializing in the retail industry. "That means they will be hiring more people, but the challenge is that with the unemployment rate at 4.2 percent, recruiting seasonal workers will be more difficult."
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According to data from Chicago-based outplacement consultancy Challenger, Gray & Christmas, retailers have announced over 6,000 store closures and 67,000 job cuts in the first eight months of the year. Despite that, the sector has also led all others in hiring announcements, with over 248,000 new jobs, mostly credited to e-commerce operations.
"Retailers have been consistently adding jobs over the last nine months, so they already have folks in place ready to step up and play a role during the busy holiday season," said National Retail Federation (NRF) CEO Matthew Shay.
Daniel Culbertson, an economist with Austin, Texas-based job search engine Indeed, noted that holiday job posting numbers have been strong on the site. He pointed out that retailers started posting jobs for seasonal staff earlier in the year, continuing a recent trend.
"Employers typically begin posting their holiday positions later in September, but this year it seems that employers aimed to get a jump on the season by posting a high volume of jobs immediately after Labor Day weekend," he said. "The earlier hiring is perhaps due to employers looking to be first to the market in light of a tight labor [situation]. If the current trend in the level of 2017 holiday postings continues, the volume of holiday postings as a share of all postings on Indeed will exceed that of the past two years."
More Logistics Help Needed
The NRF has pegged 2017 holiday job growth at between 500,000 and 550,000 in-store seasonal positions, down from last year's 575,000 new in-store jobs. Shay added that the figure does not account for the many thousands more workers expected to be hired to process surging online business, such as positions in distribution, warehousing, e-commerce, logistics and transportation.
While in-store jobs still make up the bulk of seasonal hiring, affiliated employment in logistics and warehousing has increased. Retailers have tended to double or even quadruple their warehouse staff in recent years, expecting more consumers to visit their websites instead of stores. Online retail sales jumped nearly 13 percent during the 2016 holiday season from the year before, compared with a 7 percent decline at department stores, according to the NRF.
"As holiday shopping habits turn virtual, retailers are responding by hiring more warehouse and transport workers," said John Challenger, CEO of Challenger, Gray & Christmas.
Data from the Bureau of Labor Statistics (BLS) showed that transportation and warehousing employment increased by 246,700 workers in the final quarter of 2016, 8 percent higher than the previous year. In 2007, the seasonal job gains for this sector measured just 24,300.
Target expects to hire approximately 100,000 store team members across the country—up from 70,000 last year—and fill 4,500 extra positions at its distribution and fulfillment centers.
Macy's plans to add 18,000 seasonal workers at its fulfillment centers—a 20 percent increase compared with last year. The company also plans to hire approximately 60,000 seasonal associates for positions at its Macy's and Bloomingdale's stores nationwide.
Wal-Mart announced it would bring on about 5,000 seasonal workers for its e-commerce operations, but continue its unconventional approach of providing existing employees extra hours instead of hiring more in-store seasonal staff. "We think it just makes sense to partner with the associates who know the business, are trained in serving customers and the operations of the stores, and who know the customer better than anyone," said Erica Jones, Wal-Mart's senior manager of corporate communications.
The policy—now in its second year—allows employees to work up to 40 hours a week during the holiday season (34 hours a week is considered full-time) and helps address complaints about underemployment that have plagued the company.
E-commerce giant Amazon announced plans to hire more than 120,000 people this season across its network of fulfillment centers and customer service sites, almost doubling its 125,000 existing full-time staff. The company said it anticipates opening more than two dozen new U.S. fulfillment centers this year. Thousands of holiday positions were transitioned to regular, full-time roles after the 2016 holidays, and Amazon expects to continue that practice this year.
Package-delivery services that bring online purchases to shoppers' doorsteps have been ramping up hiring since the spring, according to BLS data. The number of people employed in the sector rose by 24,000 over the first nine months of the year. UPS expects to hire about 95,000 seasonal employees this year. About 35 percent of seasonal hires were brought on as regular employees at the end of the 2016 holidays, according to Paul Tanguay, the company's global director of recruitment strategies. The company began recruiting a few weeks earlier than usual and is providing bus service for seasonal workers in certain markets where labor competition is particularly tight, he added.
Hiring seasonal staff may be more difficult this year due to the squeezed labor market, however. Not only is unemployment at its lowest in 16 years, but the rise of gig work, like driving for Uber or Lyft, is shrinking the candidate pool. Forty percent of respondents to the Korn Ferry survey believe there will be fewer applicants available this year, and 40 percent anticipate paying higher wages to attract candidates.
Melissa Hassett, vice president of client delivery for ManpowerGroup Solutions, a staffing and recruiting firm based in Milwaukee, said that retail workers are seeking more flexibility with their schedules, training and pay, to be competitive with other entry-level jobs.
"A big challenge for hourly workers is having a schedule that fits with their needs and meets their expectations," Rowley said. "The ability to schedule people out a couple weeks in advance is a very attractive selling point for any retailer."
Apps like Shiftgig have emerged which allow workers to pick up shifts for employers needing to fill sudden schedule gaps.
In-Store Experience Still Counts
Experts stressed that while retail store hiring has fallen over the last couple of years, recruiting for customer interaction is still important. Twenty percent of respondents to the Korn Ferry survey said they are placing a greater emphasis this year on hiring employees who align with their brand culture, and 15 percent said they are placing a greater emphasis on having the in-store retail experience.
"While 75 percent of respondents say they will use their mobile platform to help drive sales this holiday season, it's clear that they still are focusing on the traditional in-store experience," Rowley said. "But that experience is changing by becoming more intimate and tailored to the specific demands of the shopper."
People are coming to the store for something other than just purchasing the product, which can be done online, Rowley explained. "When I go to the store, it's for a specific need—to try something on, to touch and feel it, or I have questions about the product and need help in making a choice. Retailers are trying to figure out how to give those people the experience they're after."
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