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More Bad News on Jobs: Stores Trim Holiday Hiring

Tuesday, 6 Sep 2011 | 1:14 PM ET

Don’t expect a big boost in hiring from the retail sector during the holiday season, according to the results of a survey released Tuesday.

Shoppers stop to look at the newly decorated Christmas floor at KADEWE department store in Berlin, Germany.
Getty Images
Shoppers stop to look at the newly decorated Christmas floor at KADEWE department store in Berlin, Germany.

Although the vast majority of retailers — some 68 percent — plan on keeping holiday hiring at roughly the same level as last year, a quarter expect to trim hiring plans for seasonal workers, according to an annual hiring survey conducted by the Hay Group, a global management consultancy.

That’s a greater number than last year, when 17 percent of the retailers Hay surveyed said they would scale back hiring.

“Three months ago… people were extremely optimistic about the holidays, but that mood has shifted to one that is cautiously optimistic,” said Maryam Morse, the national retail rewards practice leader at Hay Group.

That shouldn’t come as a surprise. Consumers have been in a funk as they watch unemployment remain stubbornly highand lawmakers bicker over what to do about the economy and the country’s soaring debt. But they have been spending, which is encouraging.

About 68 percent—slightly more than last year—are expecting holiday sales to be higher this year than they were last year, the survey found.

Hay questioned 21 major US retailers including Macy’s , Coldwater Creek, DSW, Charlotte Russe, Michael’s Stores and Pier 1 Imports .

In addition, to questions over the economy, retailers have been looking for ways to trim the fat to help offset the higher costs they’ve had to absorb in recent months. Staffing is one area where this can be done and a least a few retailers think they can do it without compromising service.

Some retailers expect last year’s levels or fewer workers will be fine this year because consumers continue to shift their purchases online. In fact, 19 percent of those surveyed cited an increase in their online sales as a reason why they can keep the lid on hiring seasonal staff.

"The market is tough for seasonal job seekers, but at a macro-level, we have been seeing an improvement in hiring." -National Retail Rewards Practice Leader, Hay Group, Maryam Morse

There also could be a difference in the types of workers retailers are hiring. About 19 percent of retailers said they would hire more seasonal workers in distribution centers to support the increased volume of online orders.

That’s good news for the overall work force as distribution center jobs often pay more than jobs found within retail stores.

“The market is tough for seasonal job seekers, but at a macro-level, we have been seeing an improvement in hiring,” Morse said.

That’s because some retailers are favoring their permanent employees over their seasonal workers. While most retailers (76 percent) said the ratio of permanent to seasonal workers will be about the same as last year, 19 percent said they would hire more permanent workers this season.

“For the first time in years, retailers are worried about turnover and are working harder than ever to create engaging environments at the store level for both customers and associates,” Morse said.

This means permanent retailer workers are often being paid more for the same job. Retailers also may offer permanent workers more hours during the holiday season to make up for the fact that they hired fewer temps.

For those doing the hiring, the quality of candidate pool is better than last year, retailers said. The majority said they were seeing a steady level of seasonal job applicants, but 21 percent said they were seeing between 5 percent and 25 percent more applicants than last year.

As for promotions, the overwhelming majority said they are not planning to offer deeper discounts on Black Friday and Cyber Monday—two days commonly known for big sales.

In fact, most retailers—about 78 percent of those surveyed—expect to keep discounts in line with last year’s level.

But Christmas Creep, or the practice of offering Christmas promotions earlier and earlier in the calendar year, shows no signs of abating. In fact, one retailer who was surveyed said they began their promotions in August. Others plan to begin in October (13 percent) and September (6 percent).

“Everyone wants to be the first in the game,” Morse said.

And as evidence that optimism is still burning, a number of retailers have already stepped up their advertising, according to a report in the New York Times. This is a bid to both catch those early-bird shoppers and to show that they are ready to work hard to woo those holiday shoppers.

Questions? Comments? Email us at consumernation@cnbc.com. Follow Christina Cheddar Berk on Twitter @ccheddarberk.

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