Survey: Fewer seasonal retail jobs ahead

Philadelphia According to a survey released Wednesday by global management consultancy Hay Group, 72% of retailers predict holiday sales will be about the same or lower than last year. As a result, 57% of retailers are reducing staffing levels for the 2009 holiday season -- a dramatic shift compared with only 29% that decreased staffing levels last year.

Hay Group’s survey, in its third year, analyzed responses from 25 top U.S. retailers including American Eagle Outfitters, Best Buy, Saks Fifth Avenue and Target in September to understand retailers’ plans for the 2009 holiday season.

According to the survey, 62% of retailers are seeing more seasonal applicants this year; however, 40% are hiring fewer seasonal workers and 64% already have lower than normal staffing levels.

“With sales numbers down and consumers spending less, planning holiday staffing needs has been difficult for retailers this year,” said Craig Rowley, VP and global practice leader for Hay Group’s retail practice. “Retailers are doing what they can to survive the season, but more importantly, if the consumer decides to go on a spending spree this season, they are poised to respond fast with merchandise and staff.”

Other findings from the survey include: Compared with last year, 48% of respondents are planning to hire the same number of seasonal workers for the holiday season, and 40% are planning to hire 5% to 25% fewer workers.

The majority of respondents (60%) indicate that the ratio of permanent to seasonal store employees is about the same as last year; however, 32% indicate that they plan to hire fewer seasonal workers and more permanent staff.

With regard to sales expectations, 36% of respondents expect sales to be about the same as last year, and 34% expect sales to decrease by 5% to 25%. Some retailers (28%) remain optimistic this year and expect an increase in sales; however, this is a drastic drop from the 60% of retailers that expected an increase in sales this time last year.

When queried about store promotions, retailers have changed their promotion strategy in response to current economic conditions, with 43% indicating that they will be running more promotions and/or deeper discounts this year. Stores have also shifted their focus from running the most store promotions on Black Friday (35%, compared with 45% last year), and will instead run consistent store promotions from now until New Year’s Day (43%). In addition, 13% of respondents indicate they will run the most promotions in mid-December leading up to Christmas, and 9% will run the most promotions on the day after Christmas.

“Retailers are planning for a challenging Christmas season, and to avoid the massive markdowns they had to take last year, they have reduced inventory and staffing levels to control costs,” added Rowley. “That said, retailers have their fingers crossed that they are wrong.”