October Retail Hiring Softens
Retail Employment Gains Fall 21% From Year Ago
Published November 7, 2016
Despite large-scale hiring announcements from numerous major retailers, the number of October employment gains in the sector declined 21 percent from a year ago to 154,600. That was the fewest job gains to kick off the holiday hiring season since 2012, according to an analysis of Bureau of Labor Statistics (BLS) data by global outplacement firm Challenger, Gray & Christmas, Inc.
This year’s decline follows two consecutive years of record job gains in October. In 2015, BLS data show that retail employment grew by 194,800, which represents the largest number of October job gains for the sector on record. That bested the previous record, set the year before, when retailers added 182,800 new workers in October.
It is worth noting that record October job gains in 2014 and 2015 did not lead to record retail hiring throughout the holiday season. In fact, both years saw overall holiday hiring decline. In all, 749,100 retail job were added in the final three months of 2014, which was 5 percent fewer than 2013. Last year, the number of retail jobs added fell another 1.4 percent to 738,800.
“The shrinking number of jobs added during the holiday season does not necessarily mean that the retail industry is shrinking. As of October, there were 15,994,000 Americans employed in this sector. That is up from 15,759,000 a year ago and represents the highest October employment level ever recorded by the Bureau of Labor Statistics,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
“A few trends could be contributing to the fall off in holiday hiring. First, stronger hiring throughout the year and advances in retail technology may mean that stores do not have to hire as many extra workers during the busy holiday shopping season. Secondly, increased online shopping could be shifting the holiday job gains away from retailers toward warehousing, fulfillment, and transportation operations,” Challenger added.
Indeed, seasonal hiring announcements tracked by Challenger provide strong evidence of this shift. Over the last five years, holiday hiring plans announced by the likes of Amazon.com, UPS and FedEx have grown significantly. Meanwhile, hiring announcements from retailers have remained relatively flat or declined.
“A third factor that may be leading to the decline in holiday hiring is a lack of available candidates. In a growing number of metropolitan areas, the unemployment rate has fallen below 3.5 percent, which means that the pool of available labor is relatively shallow. Promises of higher wages and steep discounts on store products may not be enough to attract new workers,” said Challenger.
One recent MSN news story cites a survey of retailers nationwide conducted by NBC News found that they expect to pay an average of $14 per hour to their seasonal workers this year, up from $10 per hour last year.
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