January 18, 2016
Photo: RetailWire
Should retailers bring on fewer holiday hires?
According to a survey from Challenger Gray & Christmas, retailers hired fewer workers over the holidays for the second straight year. The data suggests less of a demand for sales clerks or cashiers and more for workers handling incoming and outgoing online shipments.
Overall, seasonal employment in 2015 was down 1.2 percent lower after dropping 4.0 percent in 2014. Retail employment grew by 745,800 workers in the final three months of 2015, down from 755,000 workers added in 2014.
“Just as in many other industries, technology is making it possible for retailers to meet higher demand with fewer workers,” said John A. Challenger, CEO of Challenger, Gray & Christmas. “The other factor may be the shift in Christmas shopping from brick-and-mortar to click-and-order.”
He said the continued growth in online selling means that retailers need fewer bodies on the sales floor while more workers are needed by warehouses, fulfillment centers and shipping companies, such as FedEx and UPS.
Retailers also appear to moving their hiring timetable up, supporting the trend toward earlier promotions at stores. Retail employment increased by an average of 190,400 in October. From 2010 through 2013, retailers added an average of 145,600 in October.
“The earlier hiring gains, coupled with the fact that Black Friday has lost some of its punch in recent years, means that retailers simply do not have to add as many workers in November and December as they used to,” said Mr. Challenger.
- 2015 Retail Hiring Final: November, December Failed to Match October’s Record Pace – Challenger Gray & Christmas
- Retailers Hired Fewer Holiday Workers For Second Straight Year – The Wall Street Journal (sub. required)
- 2015 Holiday Hiring Outlook: Retail Flat But Other Industries May Gain – Challenger Gray & Christmas
- Will fewer holiday hires hurt customer service levels? – RetailWire
BrainTrust
Ryan Mathews
Founder, CEO, Black Monk Consulting
Recent Discussions
Discussion Questions
Is technology or the shift toward online selling the bigger reason for the slide in holiday hires? Did stores seem understaffed or overstaffed in your visits over the holiday? If so, which areas?
Poll
The biggest reason and the smartest reason is the shift toward online selling. While the holiday retail overall sales numbers were a poor -1 percent, I have read traffic numbers down at brick-and-mortar stores by as much as 10 percent. If you have 10 percent fewer people walking through the door, you certainly don’t need the same staffing as from previous years.
But it does make me wonder, how did the retailers know this was the year to cut back?
I personally experienced no lack of sales support anywhere I shopped, but I did notice a better quality of service most notably at Macy’s. I’m not sure if anyone else noticed it as well, but it was certainly welcomed. It also made me wonder if retailers are realizing the heightened importance of the sales staff experience to offset online sales. It’s not rocket science, but it was nice to feel as if someone was paying attention.
Technology, i.e., online shopping and in-store technologies, have certainly had an impact. But, that said, I suspect the real reason for the decline is probably tied more closely to margin constraints and retail economics.
This really isn’t a headcount issue. Rather it is a competency issue. Throwing any number of untrained bodies against a holiday rush may not be as effective — or contribute to sales as much — as having seasoned, holiday-battle hardened staff who are experienced and efficient.
The notion that three underpaid bodies are more effective than one experienced, well-paid body is unique to retail and infantry assault planners. The results are often the same.
So to answer the question, I saw lots of stores with too many confused looking associates standing in huddles trying to determine what to do. Understaffed? No, just under-talented.
I agree that online shopping causes retailers to hire fewer people in stores and more in shipping and back rooms to handle packing for in-store pick ups. But which came first, the chicken or egg?
So many people move online not only for convenience, but because store experiences have been in decline for the same years as online is growing. Retailers should re-purpose some of the help they do hire to clean up the messy stores during the post-holiday returns rush as well.
The industry seems to be at a crossroads, with stores taking the hit on rising numbers of dissatisfied shoppers. Every retailer has the option to delve deeper into what’s really going on in their business and to make some improvements that work for the set of shoppers that matter the most. It’s hard to imagine that less and less human interaction is the right answer for most retailers who count on growth from the massive real estate investments most of them have.
Technology and online shopping has definitely played a role but the problem is still the lack of adequate staffing in most stores. Most retailers are having a race to the bottom. How do I do more with less? The easy thing to have less of is less employees.
The shift to online is impacting hiring plans of big and small retailers. Technology works to support and educate those hires rather than replace them in the stores.
The stores we visited seemed to be staged properly, the challenge though was in the knowledge level of the staff. If you don’t invest in training and technology, you’re bound to frustrate both the customer and the associate.
The combination of the shift to online sales along with technology is impacting holiday hiring. Traditionally, holiday hiring was for sales and other customer-facing roles. The shift to online reduces the need for these types of positions as shoppers are visiting physical stores less frequently.
Fulfillment centers and warehouses have less need for seasonal employment. Their systems leverage technology, reducing the need for seasonal staffing. Furthermore, their processes are generally scalable and can flex to accommodate higher demand without adding headcount. It’s a tougher road for those workers who hope to augment their income with extra work over the holidays.
No doubt that technology and online sales play a role in the number of employees needed. That’s anytime, not just during holiday time. As for stores being understaffed or overstaffed, it is really about the customer experience you’re trying to deliver. Knowing how many people to bring in is a function of management forecasting properly. Yes, it’s tricky. The higher-end stores won’t take a chance of being understaffed. The value focused stores will balance between the holiday crowds and being properly staffed. Recognize that one of the biggest complaints people have are the checkout lines. Last year Walmart went as far as promising to keep all lanes open during busy times.
More people are shopping online. Why brave the crowds to go to a store to talk with a newly hired employee who cannot answer your questions? Unless there is value ingoing to a store, consumers do not need to go. Unless employees actually facilitate and improve the shopping experience, they are not a reason to go. Will the retailers create a great environment and experience? If not, they do not need to hire many people and will continue to lose in-store sales.
If the question is, “is technology or the shift toward online selling the bigger reason for the slide in holiday hires?” the answer is “yes.” Both are responsible. If the poll question is, Are cashiers, sales assistance or stocking most important with regard to holiday staffing, my answer was again, “yes,” meaning that it could be all of the above (In the poll, that registers as “not sure, no opinion.”)
I believe that technology is the reason for a possible shift in the number of holiday hires. Technology that enables faster, more efficient employees will automatically reduce the need for more employees in-store.
Similarly, data collection tools that can help stores better understand their customers will help in-store employees meet demands and needs faster — thus again, reducing the need for more employees.
Moving the hiring timetable up certainly seems like a smart move to me. The longer employees have to adjust to a certain store environment, the better. Performance will improve as the comfort level grows.
Showrooming trends continue to grow. That being said, I think it’s crucial for stores to have the right number of employees so that visiting customers (whether they buy anything in store) will find products, and their in-store experience, desirable enough to go home and shop.
The stores I visited seemed staffed as normal. I did not feel as though there was a lack of employees.
More Discussions
How Timely Is the Planned Lowe’s Website Renovation Focusing on Personalization?
Is Lowe’s being timely with its website reno, and is it right to be placed as…Should Costco Be Opening Members-Only Gas Stations?
Is this the right move for the warehouse club?As Boomers ‘Age Out of Peak Purchasing,’ How Can National Brands Retain Interest With Gen Z?
According to a recent First Insight study titled “Is Gen Z Still Choosing Your Brand,” while…
The biggest reason and the smartest reason is the shift toward online selling. While the holiday retail overall sales numbers were a poor -1 percent, I have read traffic numbers down at brick-and-mortar stores by as much as 10 percent. If you have 10 percent fewer people walking through the door, you certainly don’t need the same staffing as from previous years.
But it does make me wonder, how did the retailers know this was the year to cut back?
I personally experienced no lack of sales support anywhere I shopped, but I did notice a better quality of service most notably at Macy’s. I’m not sure if anyone else noticed it as well, but it was certainly welcomed. It also made me wonder if retailers are realizing the heightened importance of the sales staff experience to offset online sales. It’s not rocket science, but it was nice to feel as if someone was paying attention.
Technology, i.e., online shopping and in-store technologies, have certainly had an impact. But, that said, I suspect the real reason for the decline is probably tied more closely to margin constraints and retail economics.
This really isn’t a headcount issue. Rather it is a competency issue. Throwing any number of untrained bodies against a holiday rush may not be as effective — or contribute to sales as much — as having seasoned, holiday-battle hardened staff who are experienced and efficient.
The notion that three underpaid bodies are more effective than one experienced, well-paid body is unique to retail and infantry assault planners. The results are often the same.
So to answer the question, I saw lots of stores with too many confused looking associates standing in huddles trying to determine what to do. Understaffed? No, just under-talented.
I agree that online shopping causes retailers to hire fewer people in stores and more in shipping and back rooms to handle packing for in-store pick ups. But which came first, the chicken or egg?
So many people move online not only for convenience, but because store experiences have been in decline for the same years as online is growing. Retailers should re-purpose some of the help they do hire to clean up the messy stores during the post-holiday returns rush as well.
The industry seems to be at a crossroads, with stores taking the hit on rising numbers of dissatisfied shoppers. Every retailer has the option to delve deeper into what’s really going on in their business and to make some improvements that work for the set of shoppers that matter the most. It’s hard to imagine that less and less human interaction is the right answer for most retailers who count on growth from the massive real estate investments most of them have.
Technology and online shopping has definitely played a role but the problem is still the lack of adequate staffing in most stores. Most retailers are having a race to the bottom. How do I do more with less? The easy thing to have less of is less employees.
The shift to online is impacting hiring plans of big and small retailers. Technology works to support and educate those hires rather than replace them in the stores.
The stores we visited seemed to be staged properly, the challenge though was in the knowledge level of the staff. If you don’t invest in training and technology, you’re bound to frustrate both the customer and the associate.
The combination of the shift to online sales along with technology is impacting holiday hiring. Traditionally, holiday hiring was for sales and other customer-facing roles. The shift to online reduces the need for these types of positions as shoppers are visiting physical stores less frequently.
Fulfillment centers and warehouses have less need for seasonal employment. Their systems leverage technology, reducing the need for seasonal staffing. Furthermore, their processes are generally scalable and can flex to accommodate higher demand without adding headcount. It’s a tougher road for those workers who hope to augment their income with extra work over the holidays.
No doubt that technology and online sales play a role in the number of employees needed. That’s anytime, not just during holiday time. As for stores being understaffed or overstaffed, it is really about the customer experience you’re trying to deliver. Knowing how many people to bring in is a function of management forecasting properly. Yes, it’s tricky. The higher-end stores won’t take a chance of being understaffed. The value focused stores will balance between the holiday crowds and being properly staffed. Recognize that one of the biggest complaints people have are the checkout lines. Last year Walmart went as far as promising to keep all lanes open during busy times.
More people are shopping online. Why brave the crowds to go to a store to talk with a newly hired employee who cannot answer your questions? Unless there is value ingoing to a store, consumers do not need to go. Unless employees actually facilitate and improve the shopping experience, they are not a reason to go. Will the retailers create a great environment and experience? If not, they do not need to hire many people and will continue to lose in-store sales.
If the question is, “is technology or the shift toward online selling the bigger reason for the slide in holiday hires?” the answer is “yes.” Both are responsible. If the poll question is, Are cashiers, sales assistance or stocking most important with regard to holiday staffing, my answer was again, “yes,” meaning that it could be all of the above (In the poll, that registers as “not sure, no opinion.”)
I believe that technology is the reason for a possible shift in the number of holiday hires. Technology that enables faster, more efficient employees will automatically reduce the need for more employees in-store.
Similarly, data collection tools that can help stores better understand their customers will help in-store employees meet demands and needs faster — thus again, reducing the need for more employees.
Moving the hiring timetable up certainly seems like a smart move to me. The longer employees have to adjust to a certain store environment, the better. Performance will improve as the comfort level grows.
Showrooming trends continue to grow. That being said, I think it’s crucial for stores to have the right number of employees so that visiting customers (whether they buy anything in store) will find products, and their in-store experience, desirable enough to go home and shop.
The stores I visited seemed staffed as normal. I did not feel as though there was a lack of employees.