US businesses are hiring fewer seasonal workers this holiday shopping season, as stubborn inflation dims the outlook for retail sales.
Employers posted 8.2 per cent fewer holiday openings this year than last year, according to jobs site Indeed. The decline came even as Indeed reported that searches for seasonal jobs rose 33 per cent this year over 2021 to their highest level since 2019.
Macy’s and Walmart have said they plan to hire thousands fewer holiday workers than they did last year. Walmart, which is adding 40,000 people this season compared to 150,000 for the same period of last year, said because it recruited aggressively earlier this year, “staffing is stronger heading into this holiday season than it was last year”.
FedEx chief customer officer Brie Carere said the company was also scaling back its holiday hiring and expects to handle a lower volume of packages this year.
The National Retail Federation, a trade group, expects retailers will hire between 450,000 and 600,000 seasonal workers this winter, down from 669,800 in 2021. Target, which plans to hire up to 100,000 people for the holiday period, has reported an 18 per cent increase in applicants for seasonal positions compared with a year ago.
“With this shrinking pool of positions and a growing interest coming from job seekers, it definitely looks like there’s a little less bargaining power on the workers’ side,” said Cory Stahle, an economist at Indeed. “The labour market is starting to cool down a little bit from last year.”
A year ago, retail employers confronted severe labour shortages while consumers, flush with savings built up during the coronavirus pandemic, opened their wallets. But total employment has since ticked up, suggesting less need for temporary workers. In October government statisticians counted 15.8mn workers in the retail trade, up 1.9 per cent from 15.5mn in the same month in 2021.
The National Retail Federation has also forecast a spending slowdown, predicting that holiday retail sales would grow 6-8 per cent year-on-year to between $943bn-$960bn in 2022. That would exceed the average growth rate seen over the past decade, but would still be below the 13.5 per cent jump seen in 2021.
With consumer prices up 7.7 per cent year-on-year in October, it would also suggest that improvements in retailers’ headline sales figures will barely keep pace with inflation.
Increasing competition for the openings that remain has allowed companies to nix hiring bonuses and other incentives to attract applicants. Wage growth for retail workers slowed to 5.1 per cent year-over-year in September from 7.4 per cent in January.
As the labour market begins to soften, fewer US workers are resigning: 4.1mn quit in September, down 10 per cent from a peak of 4.5mn in November 2021.
Michael Alexis is among the employers looking to hire less this holiday season. Last winter he hired 108 temporary workers, more than doubling the staff of his corporate events business, Teambuilding.com. The demand for virtual holiday parties had been overwhelming, he said.
But this year, he only needs 75 and his recruiters have had an easier time finding them. “The market seems more interested in our flexible, remote work positions,” Alexis said.
While seasonal hiring may have slowed, it has not stopped. As it did this time last year, Amazon announced plans to hire 150,000 people with an average starting pay of $18 an hour and sign-on bonuses of up to $3,000.
Macerich, a shopping centre operator, has hosted job fairs across the country to find labour for maintenance and security positions as well as for its retail tenants.
“The pressure [to find workers] has eased a little bit,” said Olivia Leigh, a Macerich executive vice-president. “It’s not that the pressure isn’t there, it’s just that it is not as acute as it was perhaps six months ago because we have seen a portion of the labour market return.”
UPS, the parcel delivery group, held a job fair in Long Island, New York this month. Human resources supervisor Jason Pimentel said that even after making hundreds of on-the-spot job offers, he still had about 200 positions to fill at his facility alone.
“It’s a tight labour market. It may have cooled a little bit, but it’s still a very tight labour market,” said Matt Lavery, the director of talent acquisition at UPS. “It changed by a few degrees. It was 700 degrees Fahrenheit, and now it might be like 650 degrees Fahrenheit.”
Isaiah Rhodes was among the job seekers who came to the UPS event. He said he was hired after applying unsuccessfully to openings at Best Buy and Nike stores.
“Before today, it’s been hard for me because I don’t have any experience,” Rhodes said.
Additional reporting by Andrew Edgecliffe-Johnson in New York
Source: Economy - ft.com
