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Retailers to Step Up Hiring for the Holidays

The majority of the nation's largest retail chains are planning to hang up "Wanted" signs this holiday season as they either hold seasonal hiring steady compared with year-ago levels or increase the number of workers they are seeking, according to a recent study.

PKeleher

But this finding isn't as encouraging as it may seem at first glance. Quite a number of those retailers say the slump in sales in the early summer has made them delay their holiday staffing decisions, according to research conducted by Hay Group, a consulting firm.

Hay's survey looked at responses from 20 major U.S. retailers including JCPenney , Abercrombie & Fitch and Pier 1 in order to assess retailer's plans for the 2010 holiday season.

Craig Rowley, vice president and global practice leader at Hay's retail practice, said he was surprised by the optimism among the retailers, but he stressed they are still very cautious.

The majority of the retailers—some 61 percent—will be holding hiring at 2009 levels, which were down sharply from 2007. But 22 percent plan to hire between 5 percent and 15 percent more workers.

This is a dramatic change from last year, when 40 percent of the retailers surveyed by Hay said they were planning on cutting staffing levels. Still, about 13 percent of the retailers surveyed said that holiday hiring decisions are being put off.

"They are planning cautiously," Rowley said. "The objective is to continue to increase profitability."

Although the early summer sales doldrums took a toll, the retailers are considerably more upbeat than in 2009 about the upcoming Christmas holiday season. Not a single one of the retailers said they expected sales to decline this year. Last year, about 36 percent predicted a year-over-year decline.

Even better, just more than one third predict sales will rise by as much as 6 percent to 15 percent, the survey found.

Rowley also expects retailers are delaying hiring because they know there will be plenty of workers vying for the job openings. Despite an encouraging report on the number of new workers filing for jobless benefits, unemployment remains stubbornly above 9 percent.

"For job applicants, it means additional opportunities to make a pass, but they're still throwing the football into heavy coverage," he said.

In more typical years, retailers can increase their payrolls by as much as 10 percent, providing jobs not only for the unemployed, but also for part-time workers and others looking to supplement their income during the holidays. These wages—and the store discounts that often come with these jobs—are often used to buy holiday gifts.

The retail sector has been particularly hard hit since the recession started in December 2007.

One interesting statistic in the survey is that about 26 percent said the plan to hire fewer seasonal workers and more permanent staff this holiday season.

One retailer who is hiring already is Toys 'R Us. The toy retailer, which may or may not have participated in Hay's research, plans to add about 10,000 jobsas it doubles the number of stores it will operate during the holidays. Some of those stores—and the jobs that come with them—will go away at the end of the season. These jobs are in addition to the normal seasonal hiring the company is planning.

(CORRECTION: An earlier verison of this story incorrectly said holiday hiring was down in 2009 compared with 2008. However, holiday hiring rose from 2008 to 2009, but remained below 2007 levels. According to Census data compiled by The Trade Partnership, retailers hired 618,000 workers for the holiday in 2007, 231,000 workers in 2008, and 453,000 workers in 2009.)

Questions? Comments? Email us at consumernation@cnbc.com

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