Introduction: On Course for a Stronger Upswing in Hiring

The 2018 holiday season is all set to see a considerable rise in hiring compared to last year. This is a result of the strong economy and positive consumer sentiment, which augurs well for retailers in terms of demand for goods. This upsurge in hiring is expected not just in retail, but also in allied sectors such as transportation and warehousing. This report focuses on US retailers’ holiday hiring plans, and is in continuation of our countdown to the 2018 holiday season. There were around 835,000 retail job openings in the US in July this year, which surpassed the corresponding figure from last year by around 95,000, according to the Bureau of Labor Statistics (BLS). The number of openings across all industries this July surpassed the number of hires on the last day in July, according to the latest Job Openings and Labor Turnover Survey published by BLS in September.

Favorable Environment for Job Seekers as Retailers Vie for Their Attention

Given the tight job market amidst record low unemployment and growing wages, there is now a battle of sorts between retailers to attract high quality staff for the holiday season. With retailers anxious about finding enough employees for their stores, some of them have decided to move more quickly than others. Considering the hiring announcements made so far, it seems like this year’s hiring numbers will surpass last year’s. Figure 1 lists the hiring announcements made by a few leading retailers in the period 2013–2018.

Total includes only announcements to-date. Source: Challenger, Gray & Christmas/company reports

“Retailers have been aggressively hiring seasonal workers since July to combat the tight job market. This holiday season will be a good time for workers who have had trouble finding employment or those who are discouraged or marginally attached to the labor force, as retail, transport, and warehousing jobs will be plentiful,” said Andrew Challenger, VP of outplacement firm Challenger, Gray & Christmas. In order to attract more seasonal workers, retailers are now sweetening their employment terms by offering special shopping days and discounted merchandise, along with other perks. As a case in point, Kohl’s announced “associate shopping days” and 15% employee discounts for this year’s holiday hires. JC Penney, on the other hand, announced a competitive compensation plan, paid training and time off, and 401(k) benefits (employer sponsored retirement savings plan) for eligible part-time workers. Companies such as Walmart and CVS have increased minimum hourly wages in recent months. Costco is reportedly offering a minimum hourly wage of $20 while Target plans to increase its minimum hourly wage to $15 by 2020. This year, Target stated that it will offer $12 an hour to staff, an increase of one dollar over last year’s hourly wages. The growing commitment of retailers to attract and retain staff this year is a far cry from the situation in recent years when retailers were more inclined toward cutting costs by downsizing staff and closing stores owing to a difficult retail climate. Because consumer demand has improved in recent months—dovetailing with the economy as a whole—brick-and-mortar retailers are now keen to rope in staffers to enhance holiday shoppers’ shopping experience as they prepare to face stiff competition from e-commerce retailers.

How Are Retailers Gearing Up for The Holiday Season?

Macy’s announced plans to hire 80,000 seasonal workers this year, mirroring its plans from last year. The company had, however, hired an additional 7,000 seasonal workers in December last year. Gap is looking to hire 65,000 workers, almost in line with the 63,000 staff it hired in 2014, when it had last disclosed numbers. Both Kohl’s and JC Penney had already started hiring seasonal workers in June, three months ahead of schedule compared to previous years. “We are hiring seasonal associates earlier than ever to ensure our teams are fully staffed, trained and ready to support peak shopping seasons,” said Ryan Festerling, Kohl's EVP of human resources. While Kohl’s did not divulge details with regard to the number of jobs it would be offering, JC Penney had announced in July that it had commenced hiring 18,000 workers specifically for the back-to-school season, and more than 39,000 for the holiday season, which is slightly lower than the 40,000 it had hired in the 2017 holiday season. JC Penney is also organizing a National Hiring Day in October, an event during which the company plans to hire 22,000 workers. Walmart has discontinued the hiring of seasonal workers in the last two years, choosing instead to offer additional hours to existing employees. Target announced this month that it is set to hire 120,000 seasonal workers which translates to a 20% increase over last year, and these numbers are rivalled only by Amazon’s holiday hiring numbers from last year. Besides retailers, allied sectors such as freight, transportation and logistics are also seeing increased hiring activity with leading companies such as UPS, FedEx, XPO Logistics and Radial making hiring-related announcements in the past week (Figure 2).

Source: Challenger, Gray & Christmas/company reports

XPO, the logistics company based in Greenwich, Connecticut, announced plans to recruit 8,000 North America-based workers for the upcoming holiday season. The company has stated that its retail logistics volume in August this year had swelled by 20% when compared to last year’s, this increase in volume was fueled by an increased demand channeled through e-commerce and omni-channel retail. "We are ramping up for the holiday season and another significant increase in e-commerce activity. We expect to add 8,000 seasonal jobs before November, a significant increase over last year’s holiday hiring,” said Troy Cooper, president of XPO. UPS, the multinational package delivery and supply chain management company, expects to hire 100,000 seasonal staff as it prepares for a significant increase in package volume from November 2018 through January 2019. “Every year, we deliver the holidays for millions of customers,” said Jim Barber, UPS COO, in a statement.  He continued by saying that, “In order to make that happen, we also deliver thousands of great seasonal jobs at our facilities across the country.” FedEx, the Memphis-headquartered multinational courier company, has announced that FedEx Ground, its subsidiary, would scale its operations to six days a week, year round. While making this announcement, the company had also stated that it is looking to hire circa 55,000 seasonal workers and increase the working hours for some current employees in the holiday season this year. FedEx Ground is also expected to operate six- and seven-day weeks over the holiday season.

Looking Back on Holiday Hiring Numbers

Some 650,900 new retail jobs were added from October through December in 2017, which represented a 1.1% increase over the number of jobs added during the same time period in 2016 (643,900), according to employment data from the BLS (Figure 3). The early signs this year show that retailers will grow their seasonal hiring at an even faster rate than last year’s.

Source: BLS

Key Takeaways

The stage is all set for an exceptionally busy shopping season against the backdrop of an improved economic scenario and growing consumer confidence. Retailers need to act fast in meeting their staffing needs with some having chosen to begin addressing the challenge earlier than others. Hiring of seasonal workers this year is expected to beat last years’ numbers. Various retailers have made significant hiring announcements in recent months. The trend of increased hiring in transportation and warehousing companies continues as e-commerce builds its share of retail further.