Retailers preparing for this holiday season have done so with guarded optimism. They’re up against the weakest post-seasonal hiring boost in 16 years. This year they added a mere 495,800 temp workers which is a significant drop from previous years. That wariness reflects deeper economic concerns. In addition, ongoing trade wars and possible government shutdowns could increase the drag on jobs growth even more.
Walmart, the largest employer in the private sector, says it will hire 6,500 temporary workers this holiday season. That amount is down from the 7,000 seasonal positions filled last year. The company intends to wait until the eleventh hour to finalize many hiring decisions. The catch is that this timing is entirely based on customer demand. This strategy is indicative of a broader trend away from pandemic-era flexible hiring towards more permanent adaptive hiring for rapidly changing market realities.
Radial, another major player in the omnichannel environment, is following suit and changing its seasonal hiring strategy. The retailer recently announced plans to hire temporary staff for the holidays in its almost 2,000 stores and upwards of 60 distribution centers. This is part of a wider pattern among retailers looking to keep an eye on demand before going all in on significant seasonal hiring.
The average seasonal gain in retail hiring since 2005 is just under 653,363 workers. This year’s numbers show that’s a huge break from the ordinary. Retailers hired just 543,000 workers this year, outpacing last year’s totals. This points to a more cautious stance on labor hiring heading into the busy holiday shopping season.
Economic factors have played a huge role in causing this edgy mindset. As of 2023, the U.S. labor market has continued to cool. This drop is in large part due to the trade war that former President Donald Trump started with these countries. Worries related to a possible government shutdown could add to the wild-card factors in the employment landscape.
Retailers’ hiring plans provide early indicators of what may transpire during this year’s holiday shopping season. Some analysts are projecting increases in holiday spending that are smaller than last year’s numbers.
Despite these issues, the talent pipeline does not expect a crisis in the availability of qualified workers, thanks in part to a cooling economy. Conversion events have helped thousands of businesses experience an increase in productivity while training new employees remotely. It’s now just a few hours to get a new worker up to speed, an incredible improvement compared to a process that used to take days.
Over the last year Walmart hired an additional 300 workers to its busy season. Now, they’ve got 43,000 public health employees who can easily adjust their schedules and quickly step up into surge shifts 24/7/365. These workforce shifts reflect the operational changes companies have made to their future of work strategies to not just stay nimble in an uncertain economy, but stay ahead.
Dan Casterella, a consultant in the retail space, reiterated this idea of strategic staffing during these uncertain times.
“The issue is if you overstaff and then you underperform, it’s too late.” – Dan Casterella
As retailers work to understand and address these myriad, multifaceted issues, they still find themselves racing to the media with news of layoff discussions. Andy Challenger is one of the foremost analysts of labor trends. He told us he’s seen an unprecedented increase in conversations with companies about layoffs and workforce redeployment.
“We are having lots of regular conversations with companies about pending layoffs and changes they’re making to their workforce.” – Andy Challenger
Additionally, Wnorowski of Radial noted the importance of a flexible omnichannel retail operation in these stormy waters.
“In today’s environment, brands are really looking for us to be agile.” – Wnorowski
Walmart’s tariff bill is already on track to reach $1.5 million this year. This flood creates significant financial strain on retailers that compels them to reconsider their hiring choices. This potent cocktail of economic uncertainty and shifting consumer behaviors means it’s now more important than ever for operators to balance supply with demand without compromising on costs.
