September 24, 2012
Retailers Adding Staff as Holiday Prospects Brighten
Retailers are looking to follow a strong Back-to-School period with another positive (post Great Recession) Christmas selling season and that’s good news for job seekers.
According to the U.S. Department of Commerce, total retail sales in August were up 4.7 percent over the same period in 2011. Retailers posted a 4.4 percent year-over-year increase in July.
A survey conducted in August and September by BDO USA found that chief financial officers at 100 top chains are forecasting a 3.6 percent increase in comparable store sales for the second half of 2012.
"Consumers proved resilient through back-to-school season, and that is fueling greater optimism for holiday sales results," said Doug Hart, partner in the retail and consumer product practice at BDO, in a statement.
Another study, this one published by Hay Group, found that 75 percent of retailers are forecasting an increase in sales for the holidays. As a result, 36 percent of retailers are planning to hire more seasonal staff this year, up from 10 percent in 2011. Fifty-seven percent are planning on hiring the same level of staff as last year.
"Retailers are betting big on the 2012 holiday season," said Craig Rowley, vice president and global practice leader at Hay, in a statement. "After four years of economic turbulence, they have figured out how to operate in an uncertain business environment, and are calm and cool, rather than concerned, as they head into the holidays."
Hay Group’s research found that 74 percent of seasonal hires will be store-level associates and 12 percent will be in distribution centers. The firm was not expecting to see major changes in personnel numbers in fulfillment centers as retailers have gotten better managing e-commerce operations.
- Monthly Retail Trade Report – U.S. Department of Commerce
- Retailers Forecast 4.5 Percent Increase In Total 2012 Sales, BDO USA Study Finds – BDO USA
- Retailers’ holiday sales projections and hiring plans indicate more confidence in economy, consumers, Hay Group survey finds – Hay Group
- Kohl’s Department Stores to Hire More Than 52,700 Associates This Holiday Season – Kohl’s Department Stores
- Walmart Increases Staffing Levels for the Christmas Season – Walmart Stores
BrainTrust
Recent Discussions
Discussion Questions
Have retailers adequately increased or decreased staffing levels over recent Christmas selling seasons? Where do you see the biggest staffing challenges and opportunities for retailers this holiday selling season?
Poll
The biggest challenge is simply finding workers. The biggest complaint I hear from clients is they can’t find employees due to the labor shortage of employable people. With generous extended unemployment benefits there is no incentive for people to opt into the labor force. I think if retailers could find enough people that are employable, they would significantly increase their staffs, even beyond the holiday season.
Retailers may be finding that they have leveraged expense cuts to the point of “diminishing returns.” The reported increases in hiring signal not only an improvement in the spending climate (and consumer optimism), but also a strategic decision to focus more on the top line. That being said, smart stores will pick their spots carefully for the added payroll, from e-commerce call centers and DCs to checkout lanes, not necessarily overstaffing specific merchandise areas.
Staff has been significantly pared back in recent years. The sure sign will be WE ARE HIRING signs in front door display windows at your mall stores — they are up now, post Back To School. Store Managers love this time of the year to acquire new “stars” for their floor as part-timers to then eventually convert to full time status post Holiday, or sooner.
The biggest challenge? Keeping them at minimum wage, the attraction to jump around within the mall is strong. In many ways it is all about culture of the store lead by the store manager and assistant managers plus working with people you like to be around.
While the stock market is up, jobs and wages are not. With inflation up 2.4% since December, 2011 a 3.6% increase in seasonal labor is a reasonable bet. Two factors to consider are: How are your customers doing? Upscale retailers may have a better season due to the stock market. Second is how are you doing as a retailer? A retailer taking share from competition will do better than the ones losing share.
Another trip to Vegas. A good (or bad for that matter) Back to School season as an indicator of Christmas is one indicator, albeit not a guarantee. With all the other possible changes to the environment and consumer confidence, most retailers will be, by necessity, cautious. David nails the biggest challenge — finding competent, motivated associates.
Seeing the statement in the article, “not expecting to see major changes in personnel numbers in fulfillment centers as retailers have gotten better managing e-commerce operations” scares me just a bit. Fulfillment is still a major issue specifically with the “order online/pick up in-store” process. Customer service levels vary widely from retailer to retailer, and this is one area where I would recommend spending just a bit of time to ensure this process is sufficiently staffed.
It is nice when you are not the first person to post a reply; you get to look at the comments made by others and the poll results.
Like myself, most of the people who voted in the polling question felt that most retailers were under staffed in recent years. Even with the optimism reported in the Hay study, this year we are going to still see understaffed stores for a couple of reasons.
1. Even though retailers say they plan to add more employees. They are so far below optimum staffing levels that there will still be a shortage.
2. We still have lots of people looking for jobs, but most of these are not of the quality that most employers want to employee. (Where are all of the good employees)? They are already working.
3.Those retailers that will hire will do it at the last minute which means more people on the floor. But how much training will they have had?
I wonder when more retailers are going to learn they are not in the retail business, but they are in the business of serving people!
Retailers will be able to find applicants for the open positions. The bigger question is, will they find qualified people to fill the positions?
I was amazed Saturday night, and not sure why. We went to a chain restaurant for a light meal after a movie. I won’t mention the chain whose name begins with a D and serves breakfast food all day. The waitress wanted our order almost before we opened the menu. The food came out with the order wrong, cold eggs and under-cooked pancakes. When we spoke to the manager — because the waitress had no clue why we were not pleased — he was only slightly better. To his credit he did get us more eggs slightly cooked better, but still uneatable. She was probably wondering why we did not tip her. But I can tell you for certain she forgot it in less than a minute.
And we sit here wondering where the market will be for qualified part time seasonal employees? That is not our problem. The bigger problem is finding willing and trainable applicants who have an inkling of an understanding of what working is really about.
While a comparison to previous years is a useful way to measure trend, I believe it is important to understand that all measures show that customer service and experience are worse over the past five years than any time period measured. I believe that retailers are increasing season staffing, but if they do not increase training in culture and values, as well as product and merchandising, then the effort will merely multiply the poor service over more people.
The ROI of great customer service is measured in repeat customer value over time. Retailers should not believe that customers are inherently fickle; some are, of course, but the majority are just seeking service that is kind and considerate. They will repay you in the future, truly “the gift that keeps on giving.”
Hopefully more retailers will adopt this philosophy.
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The biggest challenge is simply finding workers. The biggest complaint I hear from clients is they can’t find employees due to the labor shortage of employable people. With generous extended unemployment benefits there is no incentive for people to opt into the labor force. I think if retailers could find enough people that are employable, they would significantly increase their staffs, even beyond the holiday season.
Retailers may be finding that they have leveraged expense cuts to the point of “diminishing returns.” The reported increases in hiring signal not only an improvement in the spending climate (and consumer optimism), but also a strategic decision to focus more on the top line. That being said, smart stores will pick their spots carefully for the added payroll, from e-commerce call centers and DCs to checkout lanes, not necessarily overstaffing specific merchandise areas.
Staff has been significantly pared back in recent years. The sure sign will be WE ARE HIRING signs in front door display windows at your mall stores — they are up now, post Back To School. Store Managers love this time of the year to acquire new “stars” for their floor as part-timers to then eventually convert to full time status post Holiday, or sooner.
The biggest challenge? Keeping them at minimum wage, the attraction to jump around within the mall is strong. In many ways it is all about culture of the store lead by the store manager and assistant managers plus working with people you like to be around.
While the stock market is up, jobs and wages are not. With inflation up 2.4% since December, 2011 a 3.6% increase in seasonal labor is a reasonable bet. Two factors to consider are: How are your customers doing? Upscale retailers may have a better season due to the stock market. Second is how are you doing as a retailer? A retailer taking share from competition will do better than the ones losing share.
Another trip to Vegas. A good (or bad for that matter) Back to School season as an indicator of Christmas is one indicator, albeit not a guarantee. With all the other possible changes to the environment and consumer confidence, most retailers will be, by necessity, cautious. David nails the biggest challenge — finding competent, motivated associates.
Seeing the statement in the article, “not expecting to see major changes in personnel numbers in fulfillment centers as retailers have gotten better managing e-commerce operations” scares me just a bit. Fulfillment is still a major issue specifically with the “order online/pick up in-store” process. Customer service levels vary widely from retailer to retailer, and this is one area where I would recommend spending just a bit of time to ensure this process is sufficiently staffed.
It is nice when you are not the first person to post a reply; you get to look at the comments made by others and the poll results.
Like myself, most of the people who voted in the polling question felt that most retailers were under staffed in recent years. Even with the optimism reported in the Hay study, this year we are going to still see understaffed stores for a couple of reasons.
1. Even though retailers say they plan to add more employees. They are so far below optimum staffing levels that there will still be a shortage.
2. We still have lots of people looking for jobs, but most of these are not of the quality that most employers want to employee. (Where are all of the good employees)? They are already working.
3.Those retailers that will hire will do it at the last minute which means more people on the floor. But how much training will they have had?
I wonder when more retailers are going to learn they are not in the retail business, but they are in the business of serving people!
Retailers will be able to find applicants for the open positions. The bigger question is, will they find qualified people to fill the positions?
I was amazed Saturday night, and not sure why. We went to a chain restaurant for a light meal after a movie. I won’t mention the chain whose name begins with a D and serves breakfast food all day. The waitress wanted our order almost before we opened the menu. The food came out with the order wrong, cold eggs and under-cooked pancakes. When we spoke to the manager — because the waitress had no clue why we were not pleased — he was only slightly better. To his credit he did get us more eggs slightly cooked better, but still uneatable. She was probably wondering why we did not tip her. But I can tell you for certain she forgot it in less than a minute.
And we sit here wondering where the market will be for qualified part time seasonal employees? That is not our problem. The bigger problem is finding willing and trainable applicants who have an inkling of an understanding of what working is really about.
While a comparison to previous years is a useful way to measure trend, I believe it is important to understand that all measures show that customer service and experience are worse over the past five years than any time period measured. I believe that retailers are increasing season staffing, but if they do not increase training in culture and values, as well as product and merchandising, then the effort will merely multiply the poor service over more people.
The ROI of great customer service is measured in repeat customer value over time. Retailers should not believe that customers are inherently fickle; some are, of course, but the majority are just seeking service that is kind and considerate. They will repay you in the future, truly “the gift that keeps on giving.”
Hopefully more retailers will adopt this philosophy.