Report: Retail Hiring Decline as Industry Continues to Struggle with Amazon Effect

Retail Hiring Decline
istockphoto.com/RomoloTavani

Major retailers are not hiring as many workers as they did last year while October employment gains in the sector fell to their lowest levels since 2011, according to a recent report and data from the Bureau of Labor Statistics. The retail hiring decline represents another sign of an industry struggling to contend with factors like the Amazon effect and online retail more broadly.

Fewer major retailers announced that they would be mass-hiring for the holiday season. Gains in employment also fell eight percent compared to a year ago, hitting 136,700. This represents the lowest level since October 2011, when the sector added 134,200 jobs and the country was still recovering from the financial crisis. The report comes out of global outplacement and executive coaching firm Challenger, Gray & Christmas, Inc.

This marks the second year of declines in the industry following two consecutive years of record job growth in October. In 2015, for instance, data showed that retail employment swelled by 183,000 jobs, a hair above the 182,000 jobs created the year before. October 2016, however, represented a steep downturn, with only 149,400 jobs created, 18.4% lower versus the year before.

Seasonal retail hiring has also fallen every year since 2013. Last year saw an almost 10% decrease in hires compared to the year before.

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“The shrinking job gains in retail during the holiday season are indicative of the changing consumer habits and overall transition the industry is experiencing,” said John Challenger, Chief Executive Officer of Challenger, Gray & Christmas, Inc., in the report.

Much of the strain on the industry and the recent retail hiring decline is a result of what industry analysts are deeming the “Amazon effect.” This is a catchall term for the dominant role that online shopping has come to play in the retail space, leaving many traditional brick-and-mortar companies facing retail layoffs throughout the year.

As of October, about 15,827,700 Americans were employed in this sector, 56,600 fewer compared to October 2016.

“The ‘Amazon Effect’ and consumers’ online shopping habits are definitely shifting seasonal job gains from traditional retailers to warehousing and transportation positions. New technology in retail also eliminates the need for some back-office operations, which may lead to less hiring,” said Challenger.

“However, this new technology may just change the nature of the work rather than replace workers altogether. For instance, Walmart instituted shelf-scanning robots in their stores that flag issues for human workers to fix.”

 

Source

October Retail Hiring Lowest In Six Years,” Challenger, Gray & Christmas, Inc., November 9, 2017.

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