A Hopeful Outlook for Retailers' Holiday Hiring

Though hiring remains anemic in many U.S. industries, one area is showing promise: retail. Two consecutive months of sales gains among the nation's retailers may provide just enough confidence to trigger increased seasonal hiring this year, according to employment-trends research firm Challenger, Gray & Christmas.

Challenger cautions, however, that number of retail workers to be added during the next three months will still likely fall short of prerecession levels. In its annual holiday hiring forecast, Challenger says high unemployment, the nation's fragile economy and the possibility of further weakening are likely to keep retailers' hiring plans more subdued than they would be otherwise.

"This year we expect to see further gains in seasonal hiring, but it probably will not achieve the levels we saw in 2006 or 2007 when retailers' holiday payrolls grew by 746,800 and 720,800, respectively," Challenger CEO John Challenger says. "There is still a lot of doubt about the sustainability of this economy."

Bouncing Back Since 2008's Low

Last year, retail payrolls grew by 501,400 workers in October, November and December, a 30% increase from 2008, when holiday hiring fell to a 22-year low of 384,300, according to nonseasonally adjusted data from the Bureau of Labor Statistics.

In the wake of the recession, some 15 million Americans remain unemployed, and millions have lost their homes to foreclosure or are struggling to hold onto them. That doesn't bode well for heavy holiday spending, Challenger says.

Challenger does see some reason for optimism. Job-cut announcements by retailers plummeted 65% to 30,805 during the first eight months of the year, compared to the same period in 2009. Also, while retail payrolls are statistically unchanged from where they were a year ago, a recent hiring surge resulted in a net gain of 329,400 new workers since February.

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Also adding to the good news are increases in retail sales in July and August. After factoring out sales of cars and trucks, purchases rose 0.6%, with clothiers reporting an overall 1.2% increase.

"The stronger sales figures heading into the holidays could boost seasonal hiring above last year's activity. However, like a year ago, the hiring surge may come in November and December, as retailers wait to see how holidays sales are going before adding extra workers," Challenger says.

10,000 Openings at Toys R Us

Though November and December may seem way off, Challengers advises eager job seekers to start their searches now. Even if employers aren't yet hiring, they may begin screening candidates much sooner.

Some employers are already starting. Toy retailer Toys R Us said last week that it plans to open 600 temporary "holiday express" stores in shopping centers across the country and hire 10,000 workers. "With that much hiring planned," Challenger says, "it is doubtful that they will delay the process too long."