As the holiday season approaches, retailers are navigating a complex landscape of economic challenges and shifting hiring strategies. To shed light on these trends, we’re thrilled to speak with Sofia Khaira, a renowned specialist in diversity, equity, and inclusion, who brings a wealth of expertise in talent management and HR practices. With her deep understanding of workforce dynamics, Sofia offers unique insights into how retailers are approaching seasonal hiring amidst economic pressures, automation, and evolving consumer behaviors.
Can you walk us through the factors contributing to predictions that holiday hiring might drop below 500,000 this year, a level not seen since 2009?
Absolutely. We’re seeing a perfect storm of economic challenges impacting retailers’ hiring plans. Inflation continues to squeeze both businesses and consumers, while looming tariffs are creating uncertainty around costs. Beyond that, many retailers are prioritizing efficiency—either through automation or by leaning on existing staff rather than bringing on large numbers of seasonal workers. It’s a cautious approach, reflecting a broader mindset of doing more with less during unpredictable times.
How are economic pressures like inflation and tariffs specifically influencing these hiring decisions?
Inflation is hitting retailers hard by increasing operational costs, from inventory to logistics, which forces them to tighten budgets wherever possible, including staffing. Tariffs, on the other hand, introduce unpredictability—especially for companies reliant on imported goods. When retailers face potential cost hikes, they often scale back on variable expenses like seasonal labor to protect their bottom line. It’s a risk-averse strategy that prioritizes financial stability over expansive hiring.
Are retailers turning to automation or maximizing current staff as a long-term solution, or is this more of a temporary response to current challenges?
It’s a bit of both. Automation, like self-checkout systems or warehouse robotics, is becoming a long-term investment for many retailers to reduce labor costs over time. Meanwhile, maximizing current staff—offering more hours or cross-training employees—is often a shorter-term fix to handle holiday demand without the overhead of onboarding seasonal hires. I think we’ll see a continued push toward automation, but reliance on existing staff will depend on how economic conditions evolve in the coming years.
How does this year’s projected hiring compare to last year, and what’s driving any noticeable changes?
This year’s projection of under 500,000 seasonal hires is a significant drop from 2024, which already saw a 4% decline to about 543,100 jobs. The driving forces are largely the same—lingering inflation, cost pressures, and a shift toward efficiency—but they’ve intensified. Retailers are also more cautious after last year’s underwhelming holiday sales for some sectors, leading them to hedge their bets rather than overstaff.
Looking at the broader picture, what does it mean for the industry to see hiring levels drop to a point last experienced during the post-2008 recovery?
It’s a stark reminder of how economic uncertainty can reshape retail priorities. Post-2008, we were in a recovery mode with consumers tightening their belts, and retailers responded by slashing seasonal hiring. Today’s situation echoes that caution, though the challenges are different—less about a full-blown crisis and more about persistent inflation and global trade disruptions. It signals that retailers are preparing for a holiday season where consumer spending might not provide the usual boost.
Which retail sectors or types of stores seem to be most impacted by this downward trend in hiring?
Brick-and-mortar stores, especially in discretionary categories like apparel or home decor, are feeling the pinch the most. These sectors often rely heavily on holiday sales spikes but face fierce competition from e-commerce giants who can scale with less seasonal labor through automated systems. Smaller retailers also struggle more than big-box stores because they lack the resources to pivot to automation or absorb rising costs as easily.
Some retailers, like Target, have shared plans to rely on existing staff by offering more hours. How common is this strategy across the industry this year?
It’s becoming quite common, especially among larger retailers with established workforces. Using existing staff avoids the costs and time associated with recruiting and training seasonal employees. It also boosts morale by giving current team members more hours and income during the holidays. However, it’s not universal—smaller retailers or those with lean year-round teams may still need to hire externally to meet demand.
Why do you think many retailers are staying quiet about their holiday hiring goals this season?
A lot of it comes down to uncertainty. Retailers don’t want to commit to specific hiring numbers when they’re unsure about holiday sales forecasts or how economic factors like inflation will play out. Announcing ambitious hiring plans and then scaling back can signal weakness to investors or worry consumers. Staying silent gives them flexibility to adjust behind the scenes without public scrutiny.
How are broader economic issues, such as global trade policies and rising costs, affecting both retailers and consumers this holiday season?
Global trade policies, especially tariffs, are driving up costs for retailers who depend on imported goods, which can lead to higher prices or slimmer margins. For consumers, persistent inflation means less disposable income for holiday shopping, even if they’re still spending at certain stores. This creates a tricky balance—retailers cut back on hiring to manage costs, but if consumer spending drops more than expected, they risk being understaffed for even modest demand.
What’s your take on the possibility of a last-minute hiring surge if holiday sales end up stronger than anticipated?
It’s definitely possible, and we’ve seen it happen in past years when sales exceeded forecasts. Retailers often keep a pool of on-demand workers or temp agencies on standby for such scenarios. However, a late surge this year might be limited by how cautious companies are right now—they’re less likely to gamble on big hiring sprees without clear evidence of sustained demand. Flexibility will be key.
Looking ahead, what is your forecast for seasonal hiring trends in the retail industry over the next few years?
I anticipate that seasonal hiring will remain subdued for the near future unless we see a significant economic turnaround. Automation will continue to play a bigger role, reducing the need for large seasonal workforces, while economic pressures like inflation could keep retailers conservative. On the flip side, if consumer confidence rebounds or e-commerce growth creates new labor demands, we might see a gradual uptick. The industry is at a pivot point, and adaptability—both in technology and workforce strategies—will shape the path forward.
