Survey: Hiring plans, sales outlook more optimistic this holiday season

Philadelphia A survey released Thursday by global management consultancy Hay Group found that 64% of retailers expect holiday sales will increase over 2009, a vastly brighter picture than last year when only 28% planned for a sales increase.

The outlook for retail seasonal job applicants is also brighter, with 83% of retailers planning to hire more or about the same number of workers when compared with the 2009 holiday season.

However, the job market remains competitive. Forty-three percent of respondents expect to see more applicants this holiday season than in 2009, although that is a drop from 62% that saw more applicants last year than in 2008. Only 17% of retailers plan to reduce their staffing levels, a notable decrease from 40% in 2009.

“Retailers are more optimistic than last year headed into the 2010 holiday season. For job applicants, it means additional opportunities to make a pass, but they’re still throwing the football into heavy coverage,” said Craig Rowley, VP and global practice leader for Hay Group’s retail practice.

Hay Group’s survey, in its fourth year, analyzed responses from 20 major U.S. retailers including J.C. Penney, Abercrombie & Fitch and Pier 1 in order to understand retailers’ plans for the 2010 holiday season.

Among the other highlights from the September 2010 Hay Group retail survey, 61% of retailers plan to hire the same amount of seasonal workers this year as in 2009, and 22% plan to hire five to 15% more workers. While 63% indicate that the ratio of permanent to seasonal store employees is about the same as last year, 26% note that they plan to hire fewer seasonal and more permanent staff this holiday season. Only 25% of respondents pay seasonal workers less than permanent staff, down from 33% in 2009.

When asked how they were affected by the recent slowdown in sales, only 17% of retailers noted that they hired fewer employees throughout the year. However, 13% of respondents said that they are delaying decisions about holiday staffing until closer to the holidays.

No respondents indicated that they expected sales to decrease from last year, a dramatic change from the 36% who predicted a decrease in 2009. More than one-third (35%) of retailers predict sales will increase by as much as six to 15%.

While 26% of respondents plan to run more promotions and deeper discounts than last year, 50% plan to spread out their promotions over the season and 22% plan to start early, up from just 4% in 2009. Retailers are also continuing to downplay the importance of Black Friday promotions this year -- only 22% are running the most promotions on Black Friday compared to 2009 (35%) and 2008 (45%).

“Ultimately retailers are still planning to accommodate the recession-battered consumer, with discounts and promotions running longer throughout the season than last year,” said Rowley. “But while the consumer may be more apt to spend, given retailers’ strict inventory management, the early bird is most likely to get the worm.”