Less hiring this Christmas could hurt retailers

Just as the recession is showing slight signs for optimism, retailers are preparing to seal their own dismal fate this holiday season.

Just as the recession is showing slight signs for optimism, retailers are preparing to seal their own dismal fate this holiday season.

Because they anticipate soft sales, chains are keeping staffs lean and plan to hire fewer temporary workers for the 2009 Christmas period, according to a survey by Hay Group, the human resources consultants.

How do store operators think they could possibly differentiate themselves with superior service and an uplifting environment—when consumers desire it most, and when they might well respond with more purchases if made to feel better—when they fail to invest in personnel?  Is this the time to penny-pinch with hourly workers when the anchor selling season is at stake, when people want to desperately want to make their holidays special—and especially when legions of mature, educated members of the workforce are available to represent their banner, and job applications have surged? 

The financial part of their brains are ruling this decision, but it’s the emotional side of their hearts that should win out, that retailers should heed as people begin to regroup and heal from their harsh economic wounds. It would send a message to customers that they care enough to provide good service, and it would tell families in their trading areas that they want to help them locally get back on their feet.

The shape of the stores they shop in will disappoint consumers, and the overstressed employees they encounter will not radiate a buoyant holiday feel. Retailers have their shovels in hand as they prepare to miss this opportunity by a wide margin.

Nearly six in ten retailers (57%) are reducing staff levels for the upcoming season, twice the percentage (29%) that did so last year, the Hay Group poll of 25 companies including Target and Best Buy found.  Moreover, four in ten (40%) are hiring between 5% and 25% fewer seasonal workers.

“Retailers are doing what they can to survive the season, but more importantly, if the consumer decides to go on a spending spree this season, they are poised to respond fast with merchandise and staff,” said Craig Rowley, vice president and global practice leader for Hay Group’s retail practice.

Maybe so. But we believe the counter-intuitive strategy to hire from a high-quality pool, and populate store staffs with good choices from their communities, would be attractive and differentiating, and much appreciated and rewarded.