Retailers are significantly reducing their seasonal hiring for the upcoming holiday shopping season, marking the lowest level of recruitment in 15 years. From November 1 to December 31, 2023, the National Retail Federation (NRF) estimates that retailers will hire between 265,000 and 365,000 seasonal workers. This figure represents a sharp decline from the 442,000 seasonal hires recorded in the previous year.
The drop in hiring expectations comes amid a broader softening in the labor market. Job cuts across various sectors have reached their highest levels since 2020, with many businesses hesitant to add new employees. According to CBS News, this cautious approach reflects the ongoing economic uncertainties affecting both employers and consumers.
Despite the reduced hiring, the NRF projects holiday sales will exceed $1 trillion for the first time. Spending is expected to increase between 3.7% and 4.2%, indicating strong consumer demand even in challenging economic conditions. NRF chief economist Mark Mathews stated, “The hiring expectations reflect the softening and slowing labor market. But nevertheless, we are confident that retailers will be prepared to meet consumers with the prices, with the goods, and the convenient savings and value they’re looking for this holiday season.”
Consumer Sentiment Amid Inflation Concerns
While holiday spending is anticipated to remain robust, consumers express ongoing concern about rising prices. Inflation has been inching upward in recent months, in part due to tariffs on imported goods. An analysis from the Federal Reserve Bank of St. Louis indicated that retailers passed approximately one-third of new import duties onto consumers from May to July.
NRF senior economist Jack Kleinhenz noted during a recent briefing that consumer sentiment remains low, with many shoppers anxious about inflation. “All signals are consumers continue to be concerned about inflation and rising prices,” he explained. “Despite these concerns, I believe consumers are still willing to spend, even though their sentiment is at very low levels.”
Adapting to New Hiring Strategies
Some retailers have adapted their hiring strategies to mitigate the impact of fewer seasonal workers. For instance, Target is soliciting its current employees for additional shifts during the holiday season before seeking new seasonal hires. Mathews highlighted that while hiring may be reduced, layoffs in the retail sector have also diminished, creating a more stable workforce environment. “You might see less hiring, but we are seeing less firing in the retail industry,” he remarked, suggesting a balancing act between hiring and retaining existing staff.
The NRF’s predictions for the holiday season underscore a complex interplay between consumer behavior and economic pressures. Retailers are gearing up to meet anticipated demand, even as they navigate a changing labor landscape.
