Professor Sherry Jarrell says Retailers Remain Cautious with Temporary Holiday Hiring

9.29.2012 Article, Business Analytics, Careers, Faculty News, Human Resources, Retail

Holiday hiring on the rise
Reposted from Charlotte Observer | By Ely Portillo

Some retailers plan to hire more seasonal workers this holiday season, a move economists said indicates retailers are expecting good sales during the industry's most important season.

But with Mecklenburg's unemployment rate at 9.7 percent, above the national average, and more than 47,000 out of work, temporary jobs might not provide more than a minor boost to the local economy.

Still, for Charlotteans like Harristine Andrews, who's been out of steady work since she lost an administrative assistant position in 2008, seasonal jobs offer some hope.

"It's been a rough few years," said Andrews, who plans to apply for holiday retail positions at multiple stores in Charlotte. Any extra money would help with the bills.

For others, such as CPCC library manager Melanie Wood, holiday employment offers some welcome spending money. She's applying for work at Crate & Barrel at night and on the weekends to pay for her holiday purchases.

"I plan on buying a lot of stuff at Crate & Barrel, so it will probably even out," said Wood.

A survey by the consulting company Hay Group found 57?percent of retailers plan to hire about the same number of seasonal workers, while 36 percent plan to hire more than last year.

That's up from 10 percent who hired more workers last year.

The International Council of Shopping Centers is forecasting a 3 percent rise in holiday sales at chain stores in the U.S., compared to 2011.

Good news or bad?

"I think that we're getting a lot of little signals, we are getting radio waves out of deep space, that things are better than things were a year ago," said Harry Bowen, an economics professor at Queens University of Charlotte.

Sherry Jarrell, professor of finance and economics at Wake Forest University, said more temporary jobs could be a negative sign, as retailers remain cautious and hesitate to add permanent jobs.

"Anything temporary in the business world is a signal of uncertainty," said Jarrell. "The more temporary employment there is, to the extent that it means less permanent employment, is negative."

Retailers hire holiday workers to add staff to their sales floor and distribution centers during the busiest time of year. Holiday hiring typically starts in September and picks up in October as the holidays get closer.

Wal-Mart, the nation's largest retailer, has said it plans to add 50,000 temporary workers this year and give its current employees more hours. Wal-Mart didn't say how many it added in 2011, but said this year’s number is an increase over last year.

Kohl's plans to hire about 52,700 workers, up 10 percent from last year. The retailer is hiring an average of 41 workers for each of its department stores, and 5,700 at its distribution centers. Toys 'R' Us is hiring 45,000 seasonal workers, up 12 percent over last year.

Target said it plans to add 80,000 to 90,000 employees, down slightly from the 92,000 temporary workers it added last year. In part, that’s because Target said it retained a third of last year’s hires as permanent employees.

Most holiday jobs won’t become permanent positions. Toys 'R' Us, for example, said 15 percent of the 40,000 workers it hired last year stayed on after the holidays.

Having a holiday job is better for workers than being unemployed, Jarrell said.

"Relative to them getting no work over the holiday season, of course it’s better," she said.

But with unemployment remaining elevated and other economic indicators still weak – GDP growth in the second quarter was revised down to 1.3 percent this week, for example – Jarrell cautioned against too much enthusiasm over holiday hiring.

"This is a finger in the dike," she said. "And the pressure behind the dike is growing."