Retailers are expecting holiday sales to reach new heights this year and, in turn, have been adding more employees to their seasonal workforce.
Several projections from industry experts and analysts point to a positive outlook for the 2014 holiday season. Take, for example, the National Retail Federation (NRF), which expects sales to increase 4.1% over 2013. To keep pace with increased demand, the NRF expects retailers to add between 725,000 and 800,000 seasonal jobs. In 2013, more than 768,000 seasonal jobs were added.
“These holiday positions offer hundreds of thousands of people the opportunity to turn their seasonal position into a long-term career opportunity in retail,” noted NRF President and CEO Matthew Shay. While traditional brick-and-mortar retailers are striving to add more manpower to their stores, others are ramping up their back-end operations and fulfillment centers.
Of the multichannel retailers hiring more employees for the holidays, Macy’s will be adding 86,000 employees to its payroll for the holidays, followed by Target, which is hiring 70,000 associates. Wal-Mart is adding 60,000 seasonal workers, a 10% increase over last year. Kohl’s, meanwhile, plans to hike hiring up by 34%, adding 67,000 employees for the season.
Even more niche retailers are joining the hiring bonanza. For example, GameStop is tacking on 25,000 employees, a 47% increase over 2014. The seasonal hires are expected to help provide better customer service in stores.
Online giant Amazon is hiring 80,000 workers to ramp up its fulfillment centers and keep pace with order surges throughout the season. A 14% increase over 2013, the employees will be dispersed throughout Amazon’s more than 50 fulfillment centers and 15 sorting services. Last year, Amazon hired 70,000 seasonal workers, 10,000 of which eventually became full-time employees.
“There is definitely an increase in positions, but it’s also important to note that retailers were trying to get holiday hiring started earlier this year,” said Luis Salazar, CEO of Jobaline. “The process started about two or three weeks earlier than usual, so you can see how aggressive they are.”
In the retail industry specifically, wages paid to hourly workers also went up approximately 20%, Salazar explained, indicating that retailers are eager to onboard dedicated employees that offer quality service experiences.
However, there is a possible disconnect between supply and demand, as more retailers may be struggling to find optimal employees that are in close proximity to locations, Salazar noted. “This time of year in 2013, employers were consistently asking for candidates that were no more than 20 miles from a location. This year, because they can’t find workers, they’ve expanded that reach to 30 miles to attract more hires.”
But does an influx in seasonal hiring imply a positive employment outlook and more full-time opportunities? Not necessarily, according to Salazar. “All signs point to a strong market but seasonal jobs go away after the holidays end. And although part-time hiring has increased, there has been a shift from more full-time employees to more part-time employees, especially in the past year.”
Some retailers are even investing in new tools and technologies that eliminate the need for physical store associates.
“For example, self-checkout kiosks are being used in stores and virtual hostesses are being rolled out at restaurants and hotels,” Salazar said. “If you look at the incremental cost of labor, automated machines are way more affordable and can be paid off in less than a year.”
Training And Education: A Lost Opportunity?
Although the retail workforce is growing for the holiday season, industry experts are debating whether year-round staffing has reached an optimal level.
“Retailers are definitely getting more serious, and there is a significant uptick in holiday hiring but I think they are still understaffing,” said Bob Bahramipour, CEO of Gigwalk.
There also may not be enough time to sufficiently onboard, train and empower employees to create exemplary in-store shopping experiences.
“There is no time to train people for the holidays,” Salazar advised. “The hiring process is so manual. Even when people apply online, a human needs to sift through those submissions and set up interviews. This sets the training process back significantly.”
If retailers do not implement the training and tools required as new employees are hired, “they’re just going to have a lot of bodies in the store that aren’t going to solve the key problems that emerge during the holiday season,” Bahramipour said. “But some retailers are trying to make up for things by implementing better tools and intelligence.”
For example, Big Data and analytics tools can provide retailers with intelligence regarding how to staff employees and disseminate tasks. Yet currently, “only 5% of retailers have the tools to help employees be smarter and better coordinate with each other,” Bahramipour said. “In an era where everyone has a smartphone in their pocket, that’s crazy.”
Additionally, as e-Commerce acquires a larger share of total retail sales, organizations will begin to hire more employees in emerging digital channels.
“The industry as a whole is changing as consumer behaviors continue to evolve,” Bahramipour said. “As retail formats change, and some retailers implement smaller, more boutique style locations, we’ll see a change in the physical retail infrastructure.”
Despite retailers being key employment providers and being very labor-intensive, the hiring policies and processes will begin to change in 2015 and beyond.