Consumer Nation

Don't Bet on Retailers to Boost Hiring This Holiday Season


Unemployed workers, who are looking forward to the holiday season, in the hope that they can snag a seasonal retail job may be disappointed.

The retail workforce is more stable than it's been in a long time, and that may put a damper on holiday hiring, consultants said.

With the unemployment rate skyrocketing toward 10 percent, fewer people have had the confidence to leave their jobs, even when they aren’t ideal. This trend has reached into the retail sector, where a preliminary report from the Bureau of Labor Statistics showed a voluntary turnover rate of 2 percent in July for the industry.

Checkout cashier

As a result, retail staffs are much more experienced than they were one year ago, allowing companies to cut back on recruiting and training costs, as well as improve their customer service, consultants said.

“A big problem in retail is keeping people long enough that they know the ropes,” said Dan Stanek, executive vice president with Retail Forward. “They would love to have experienced staff [and] experienced managers.”

One store benefiting from the trend is Home Depot – where 90 percent of its 300,000 employees have undergone an extensive, six-month training program for their specific department.

The home improvement store typically reports a turnover of about 40 percent, but since the onset of the economic crisis, these figures have plummeted into the single digits, CFO Carol Tome told CNBC.

Home Depot CFO on August Retail Sales Data

“We think part of that is because they love working for us, we think part of that is the economy,” Tome said.

A low turnover rate is especially important for Home Depot because its workers require a much higher knowledge base – and a significantly longer training period – than those working in traditional retail stores.

Another result of maintaining a veteran staffs is that it could reduce seasonal hiring for traditional retailers, which tend to bulk up their employment numbers in the months leading up to December. This, in turn, would make the retailers more efficient, as they wouldn’t waste time recruiting and training employees who would only be there a few months.

Target, for instance, plans to hire less seasonal employees than it did last year, and the stores will instead increase their current worker’s hours, cross-training them in multiple departments, spokesperson Brandy Doyle said.

More retailers are also hiring floaters — part-time employees who have already been trained and periodically fill spots for extended periods of time, said Dan Butler, vice president of retail operations for the National Retail Federation.

“I think you’re going to see staffing levels that are slightly above last year, but not dramatically,” he said.

Retail Forward is predicting this to be the second-worst holiday season in four years, but Stanek said it will still be an improvement over last year’s dismal sales. And since sales and employment tend to go hand in hand, he also expects most retailers to beef up their recruiting this year.

“That doesn’t mean they’re going to go crazy with hiring this season, but I think they’re going to loosen up a little bit,” he said.

One example is Toys ‘R Us, which recently announced plans to open 350 “Holiday Express” stores starting in October. The company said it will hire about 1,000 temporary workers to operate the so-called pop-up stores it will add in shopping malls.

Butler said those retailers looking for workers this year will have a much bigger pool of applicants to choose from than in the past. Because the unemployment rate has risen so high, many people who previously never would have considered retail work – much less seasonal employment – are likely to apply, he said.

“It’s definitely a challenging time for employees, and they’re going to want to hold onto a solid thing for as long as they can,” Stanek said.

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