Labor costs and rising interest rates may cause retailers to scale back holiday hiring.
Most retailers appear to be taking a cautious stance toward seasonal hiring this year.
As labor costs and interest rates rise, employers may rein in their typical seasonal hiring sprees, as both consumers and employers feel the crunch, according to globalcoaching firm Challenger, Gray & Christmas.Due to the current environment, Challenger predicts retailers will add 410,000 seasonal positions, the lowest number of jobs added in the final quarter since 2008, according to an analysis of non-seasonally adjusted data from the Bureau of Labor Statistics (BLS) by Challenger.
Amazon's announcement that it planned to hire 250,000 seasonal employees is the highest number of holiday hiring plans for the fourth quarter that Challenger has tracked for the company — or any company — since 2012. However, many other companies have not announced or have announced fewer holiday hiring plans, according to the firm.
“With inflation slowing, companies, particularly retailers, won’t be able to pass increased labor costs to the consumer as easily,’ said Andrew Challenger, workplace and labor expert and senior VP, Challenger, Gray & Christmas. “This could lead to more cuts, rather than more added positions, as evidenced by the increase in job cuts in this sector.
Among the national retailers that have announced their seasonal hiring plans are Target, which plans to hire 100,000 workers, the same as for the last two years. Macy's plans to hire 38,000, while Bath & Body Works announced intentions to hire 32,500. Kroger announced it would hire “thousands,” but did not specify a number
The United States Postal Service (USPS) announced 10,000 hiring plans, down from 28,000 last year.
During the 2022 holiday hiring season, retailers added 509,300 jobs, revised down from 519,400, according to the BLS. That is down 27% from the 701,400 jobs added during the holiday season in 2021.
This year, retail employment in August is 15,530,000, according to preliminary non-seasonally adjusted data from the BLS. Peak employment for the sector in August occurred in 2016, when 15,809,900 workers were employed.
The highest employment in retail recorded in a single month occurred in December 2016, when 16,338,300 workers were employed.