Holiday Retail Jobs Could Be Hard to Come By

Competition for holiday retail jobs could be fierce this year, according to several recent surveys, as stores hire cautiously in the face of flat-lining sales and budget-conscious customers.

Stores typically begin bringing on temporary workers in October to handle the crush of Christmas shoppers. But this year retailers expect hiring will be slow -- when it occurs at all. According to consulting firm Hay Group, about 40 percent of retailers plan to reduce the number of people hired by as much as a quarter. Meanwhile, the growing unemployment rate has prompted more people to fill out applications.

"Retailers are planning for a challenging Christmas season," said Craig Rowley, vice president of Hay's retail practice. "That said, retailers have their fingers crossed that they are wrong."

Retail jobs account for about 11 percent of the U.S. workforce, according to government data. The industry has shed nearly 600,000 positions in the past year as retailers grappled with declining sales.

That has helped push the national unemployment rate to 9.8 percent in September. Though the unemployment rate in the Washington region fell in August, to 6.0 percent from 6.2 percent the previous month (in figures that are not seasonally adjusted), the improvement was driven by an increase in government jobs and contracting. The region continued to lose jobs in the retail sector.

The job losses have created a vicious cycle in which retailers curtail hiring because of poor sales, and shoppers cut back spending because they fear for their jobs.

"We are in a period of flux, no question," said John Challenger, chief executive of Challenger, Gray & Christmas, an outplacement consulting firm.

The vortex began last year when the economy crumbled just before the start of the holiday shopping season. The stock markets plunged, and consumers clamped their wallets shut, sending retail sales into a tailspin. Stores were stuck with shelves of merchandise ordered long before the financial crisis, but they were able to cut costs by slashing their workforce.

Retailers chopped the number of new hires last year by 47 percent, to 384,300, the smallest number in two decades, according to Challenger, Gray & Christmas. The average number of staffers added during the holidays is 680,590.

The industry took a bigger hit after the holiday season as retailers shut down stores that did not perform well, shed seasonal hires and laid off workers. Macy's and Home Depot both cut about 7,000 jobs. Circuit City was forced out of business, leaving 30,000 workers without jobs.

"Labor is the most adaptive of the resources in their production equation," said Robert Yerex, chief economist at Kronos, a workforce consulting firm. "When it comes to people, they can be much more flexible."

But as retail sales have stabilized following last year's dramatic declines, so has staffing. According to Kronos, the number of hires rose slightly each month through August, and more people are holding on to those jobs.

A recent survey by consulting firm BDO Seidman of chief financial officers at major retailers showed that 38 percent considered layoffs the most effective cost-cutting tool this year. But for future cuts, more companies said they are planning to reduce inventory and slow expansion rather than rely on layoffs. About 83 percent of executives surveyed predicted an economic turnaround by the second quarter of next year.

Challenger said he expects retail hiring this holiday to pick up slightly compared with last year, but with the unemployment rate at a 26-year high, competition for available jobs is expected to be intense. He estimated that 9.2 million people who are working part-time jobs are looking for full-time work, roughly double the number at the start of the recession.

"My sense of it is that it's not going to be as bad as it was last year," he said. "But I don't think we've come way up from there."