NR Market Watch

CHICAGO, September 20, 2010 – Two consecutive months of sales
gains may provide just enough confidence to trigger increased seasonal
hiring by the nation’s retailers this year. However, the number of holiday
workers added to retail payrolls in October, November and December is still
likely to fall short of pre-recession levels.

In its annual holiday hiring forecast, global outplacement consultancy
Challenger, Gray & Christmas, Inc., said that retailers may continue to be
cautious when it comes to staffing, knowing that the economy is at a fragile
stage of the recovery and could turn on a moment’s notice.

Last year, retail payrolls grew by 501,400 workers in October,
November and December, according to non-seasonally adjusted data from
the Bureau of Labor Statistics. That was a 54 percent increase from 2008,
when holiday hiring fell to a 22-year low of 324,900 extra holiday helpers.

“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. There is still a lot
of doubt about the sustainability of this economy,” said John A. Challenger,
chief executive officer of Challenger, Gray & Christmas.

“Retailers do not want to be caught with too many workers at a time
when many of the fundamentals needed for strong consumer spending remain a
little shaky. There are still nearly 15 million Americans out of work and many
have lost their homes or are struggling to hang on to them. This does not bode
well for heavy holiday spending,” said Challenger.
Challenger does see some reasons for optimism. Job-cut announcements
by retailers have fallen 65 percent from a year ago. Retailers announced 89,242
job cuts between January and August 2009. This year, the eight-month total is
down to 30,805.

Additionally, while retail payrolls are still lower than they were a year
ago (14,463,000 as of August, compared to 14,497,000 in August 2009), a
recent hiring surge resulted in a net gain of 329,400 new workers since
February.

Meanwhile, retail sales increased 0.3 percent in July and 0.4 percent
in August. The numbers were even better when car sales were removed
from the mix, with purchases climbing 0.6 percent. Spending at clothing
stores rose 1.2 percent.
“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,” said Challenger.

“This should not discourage holiday job seekers from starting their
search now. Even if retailers are not ready to make hiring decisions until
November, they may begin screening candidates much earlier. Some
employers may already be starting. Toy retailer Toys R Us announced last
week that it will be opening 600 temporary ‘express’ stores in shopping
centers across the country and will need to hire 10,000 workers. With that
much hiring planned, it is doubtful that they will delay the process too long,”
said Challenger.

“It is also important for job seekers to remember that the 500,000 to
600,000 extra workers we are expecting to be hired represents a net gain.
Retail employment is volatile in the best of times. So, there is often
simultaneous hiring and voluntary or involuntary separations,” said
Challenger.

For example, retail payrolls added 501,400 more workers than they
lost during the last three months of 2009. Overall, retail employers hired
1,610,000 during that period, according the Bureau of Labor Statistics Job
Openings and Labor Turnover survey.
“The point is that there is constant churn in the retail industry. You
may walk into a store one day and they are not hiring. Walk in the next day
and they may have had an employee quit and plan to replace him,” said
Challenger.

According to Challenger, the best opportunities for seasonal job seekers
will be at the large discounters like Target and Wal-Mart, which will be heavily
favored by cost-conscious consumers this holiday season. However, job seekers
may have to look beyond the sales clerk positions for available spots.

“The big box stores need extra workers on the floor, but they also
need extra workers in their shipping facilities and overnight stocking
positions. Opportunities also exist outside of retail, in areas like catering
and with shipping companies such as UPS and FedEx,” said Challenger.
“Job seekers should also be prepared to be on standby. In other
words, retailers may conduct interviews in September and October and
prepare a list of hirable candidates that they will call only when it becomes
obvious that more manpower will be needed.

“When job seeking in retail or any other sector, it is important to
remember some key interview guidelines: dress appropriately, be on time,
show enthusiasm and follow up. According to one hiring manager, the
biggest mistake job applicants make when seeking a holiday position is
“demanding a specific schedule from prospective employers.”
Temporary workers must be prepared to be flexible, whether it is
hours or type of work. Either can vary as the holiday season progresses.
“Holiday job seekers should start their search by contacting friends
already working in establishments that could need holiday workers. You
should also target establishments of which you are a frequent customer. If
there are certain retail outlets where you would prefer to work, start going
there when business is slow and try to make a connection with a manager or
assistant manager. The key is separating yourself from the pile of applicants
the store will see between now and Halloween,” Challenger concluded.