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Cooling job market doesn't take the heat off the holiday hiring spree

To increasing staffing levels amid a stiff competition for workers, companies have been drastically speeding up the hiring process, boosting pay and holding mass hiring events.
Amazon Sortation Center In Georgia Prepares For Holiday Rush
Workers sort packages at the Amazon AGS5 facility on Oct. 27, 2022 in Appling, Ga. Sean Rayford / Getty Images file

WASHINGTON — Despite headlines of mass layoffs in corporate America and fears of recession, it's still a worker's market for those looking to get temporary holiday jobs as retailers and shippers continue to battle for employees ahead of what they expect to be a record holiday shopping season.

Companies have been drastically speeding up the hiring process to boost their staffing levels amid stiff competition for workers. Some have increased pay to more than $30 an hour in some markets, are offering up to $3,000 in signing bonuses or are holding mass hiring events to secure workers before they get better offers elsewhere, according to companies, recruiters and economists.

Retailers are entering the holiday season amid a swirl of mixed economic signals. Inflation remains at the highest levels in decades and there has been an uptick in mass layoffs and hiring freezes, yet the unemployment rate is still relatively low and consumer spending has continued to be strong. That leaves companies expecting another busy shopping season as they continue to grapple with a competitive job market. 

“It still is a very, very tough hiring environment, especially in states and cities with very low unemployment rates,” said Julia Pollak, chief economist at ZipRecruiter. “Employers tell us that they are still really struggling to find qualified candidates and to find motivated willing candidates. So, even when they sign candidates, they’re very worried about ghosting, that people won’t show up on day one, because people have so many alternatives and are taking the best offer that they get.”

Retailers expect holiday sales to be up 6% to 8%, with companies planning to hire 450,000 to 600,000 temporary workers — at the top end, that would be a dip from last year, and if retailers meet the bottom end of their hiring targets, it would be the lowest number of temporary hires since 2009, according to the National Retail Federation.

The holiday hiring comes at a time when retailers were already employing the highest number of workers since 2016 and the number of transportation and warehouse workers are at record highs, according to the Bureau of Labor Statistics. Before the holiday hiring rush, retailers were already looking to fill 800,000 open positions, according to the retail federation.

But at the same time, that tight labor market has provided a benefit to retailers heading into the holiday season because it has driven up wages — giving consumers more money to spend even in a time of massive inflation.

“The labor market is a real conundrum for employers and is one of the reasons consumers have behaved in such a resilient way because wages are increasing and there’s pressure on the market, and that keeps people spending,” Matt Shay, president of the retail federation, said in a call with reporters earlier this month. 

There are some signs though that the labor market is starting to shift in employers' favor. Job seekers are looking for seasonal work at the highest rates since 2019 ,with searches up just over 16% from last year, according to data from Indeed. Meanwhile, seasonal job postings are 2% lower than last year, according to the hiring website.

“We see fewer job postings than we saw last year and more people looking in that smaller pool of postings, and the result of that is workers might have a little less bargaining power than they had in the seasonal market last year,” said Cory Stahle, a senior economist at Indeed. “But we still are in this really tight labor market where even though things have cooled off a little bit, the labor market still remains really tight.”

For UPS, which is hiring 100,000 seasonal workers again this holiday season, it remains a war for candidates.  

The company has streamlined its hiring process, cutting out in-person interviews, so that within 25 minutes it is able to process an application, give a job offer and complete the required payroll paperwork for the vast majority of its openings, including warehouse workers, package handlers and drivers. 

“Someone isn’t applying to one job, they’re applying to 10 jobs, and the company that best meets that candidate’s needs is going to end up winning that candidate,” said Matt Lavery, UPS global director of sourcing, hiring and onboarding. “We’re trying to increase our odds with every candidate by being as transparent, being direct and also paying a very good wage.”

The company is on track to meet its hiring goal, but some regions remain particularly difficult to find workers, such as Minneapolis, parts of New England like Cape Cod, Denver and the surrounding mountain communities. 

“It’s hard to give a national view that’s one view of the whole country. It’s really different stories within the country that you have to pay attention to and be very nimble and very agile to adjust to,” Lavery said. “Certain pockets may be a little better than last year, and in some areas it’s become extremely tough.”

Macy’s Inc. has also been speeding up its hiring process with applications taking as little as five minutes and the majority of applicants getting an offer within 48 hours. The retailer will be adding 41,000 holiday workers at its Macy’s, Bloomingdale’s and Bluemercury stores starting at $15 an hour and is offering up to $500 in referral bonuses.

"This speed is imperative during holiday hiring," John Patterson, Macy’s vice president of talent, said in an email. "While our application process is quick, we’re asking questions that matter. Last year, this enhanced, centralized hiring process allowed us to hire fewer colleagues of higher talent levels with more competitive pay who stayed on, resulting in a 40% reduction in turnover."

Despite Amazon cutting as many as 10,000 headquarter jobs, it said last month that it is planning to add  150,000 seasonal workers with an average starting pay for warehouse and delivery workers of $19 an hour and sign-on bonuses ranging from $1,000 to $3,000.

The U.S. Postal Service will hire just half the number of people this year as last year, but officials say it is in a better staffing position going into the holidays than last year and has increased its automated processes to meet the rising demand. Postal officials assured members of Congress during a hearing earlier this month that they will have the staffing needed this holiday season and be able to avoid a scenario such as the one in 2020 when the agency struggled to deliver packages by Christmas. 

“We never have enough people, I’ve been here 25 years, but we manage. We move people around, people work overtime, people do extraordinary things,” Edmund Carley, national president of the United Postmasters and Managers of America, said during the hearing. “We’ve hired in the last couple of years over 400,000 people and we continue to hire, so I don’t think that I’m ever fully staffed. We’re always working, but we will deliver. It will be a successful season, I’m sure.”