Seasonal Retail Job Market Eases
Surging unemployment is generating a relative wealth of job applicants for retailers that have struggled in recent years to find employees for the holiday season. But the stalled economy also is prompting retailers to move cautiously on seasonal hiring, a development that bodes poorly for recently laid-off workers.
The Sears, Roebuck & Co. store in Torrance, for example, has hired 100 seasonal employees, the same number added during the 2000 holiday season, to its cadre of 550 full-time employees.
“We hire to the [economic] trend,” store manager Joe Diaz said. “In the past couple of years, that meant increases. Now, the trend appears to be flat at best.”
It’s the same story at Kmart Corp. and other major chains. As year-to-year sales increased during the 1990s, seasonal hiring reflected the upswing. “But this year, we do plan to have staffing levels flat with last year,” Kmart spokeswoman Julie Fracker said.
This holiday season’s hiring picture is a sharp contrast to last year and the second half of the booming 1990s, when a tight job market forced retailers to dangle signing bonuses and fatter paychecks in front of job seekers.
Now, retailers hope to control costs by trimming back on seasonal employment. But unlike airlines that have canceled flights and cut payrolls, retailers can’t risk alienating consumers with poor service--a frequent customer complaint in recent years.
“A lot of people are saying sales will be roughly flat compared to last year, but that’s still a significant amount of activity,” said Tony Cherbak, a partner with Deloitte & Touche. “Retailers still have to hire to normal staffing levels.”
The fourth quarter can make or break retailers that already have suffered through a tough year. The International Mass Retail Assn. predicts that average household spending during the holidays will total $863, up from $828 in 2000. But other observers question whether consumers will spend freely given concerns about the economy and terrorist acts.
Before the Sept. 11 terrorist attacks, Merrill Lynch was forecasting a meager 3.2% increase in overall holiday merchandise sales. The brokerage firm subsequently cut its estimate to 0.2%, the smallest increase in 33 years and a gain that would lag behind the recession years of 1974 and 1990.
The retail association and other observers also predict that recession-wary shoppers will flock to discounters and warehouse-style operators that emphasize lower prices rather than in-store service.
Holiday staffing remains an important element in the economy. Retailers added 623,000 seasonal employees during the 2000 holiday season, according to the National Retail Federation. Target Corp., for example, is adding as many as 80 part-time workers at each of its 1,055 stores, said company spokesman Douglas Kline.
Retailers traditionally complete holiday hiring early in November so newcomers can be trained before the post-Thanksgiving rush. Many managers are waiting longer this season to fill part-time rosters; others are asking full-time employees to work longer shifts or are rethinking how seasonal help is used.
Holiday staffing at the JCPenney store in the Fox Hills Mall in Culver City will be equal to 2000 levels. But instead of adding salespeople, store manager Don Gergovich is adding more employees who arrive after the store closes to straighten items on shelves and restock merchandise. Gergovich hopes the strategy will free up higher-paid salespeople to concentrate on customers’ needs.
Along with store managers nationwide, Gergovich is closely monitoring customer patterns to ensure seasonal hiring costs stay in line with anticipated revenue. Gergovich knows he’s losing business generated by nearby Los Angeles International Airport, but he expects more business from nearby residents and office workers who stay home for the holidays.
“What’s noteworthy this year is that there’s so much uncertainty,” said Daniel Butler, vice president of retail operations at the National Retail Federation. “Everybody is paying closer attention to what they’re doing for holidays.”
Local economic conditions also shape seasonal hiring. Wal-Mart Stores Inc., the nation’s largest retailer, is adding jobs “on a store-by-store basis,” company spokeswoman Sharon Weber said. Though the chain anticipates a “good Christmas,” some regions face “a tough retail market,” Weber said.
Southern California’s holiday hiring is being shaped by economic realities evident before Sept. 11.
“What you’ve seen in retail employment in Southern California over the last couple of months was very, very soft,” said Jack Kyser, chief economist for the Los Angeles Economic Development Corp.
Before the attacks, retailers in Los Angeles and Orange counties “were already pulling in their horns.... It’s a very ominous sign,” he said.
Southland store managers say they’ve yet to see a wave of applications from those who have lost jobs in airline, hotel and other industries suffering after the attacks.
“It might be a little bit heavier than last year,” said Dave Soule, merchandising manager for the Best Buy Co. store on East Foothill Boulevard in Pasadena, which has hired more than 40 seasonal workers. “But we’re not getting overwhelmed.”
Word that California’s unemployment rate reached a high of 5.7% in October could change that picture as newly unemployed workers begin searching for jobs. Kyser, though, doesn’t expect laid-off workers who’ve lost good-paying jobs with technology and dot-com companies to immediately line up for part-time retailing jobs.
“Retail often is seen as the fall-back position,” Kyser said. “It doesn’t always have the most glowing reputation.”
And, though the signing bonuses and fatter paychecks of the booming 1990s largely have disappeared, retailers are still struggling to hire qualified candidates in regions where unemployment levels remain relatively low.
“This was going to be an interesting holiday season even before [Sept. 11],” Butler said. “Those events made everyone, including retailers, rethink what they were doing.”