Unwrapping Holiday Hiring

December 18, 2017

Retailers and package delivery companies rely on the holiday season to provide an end-of-year boost in sales that makes operating during the rest of the year worthwhile. Some businesses hire extra workers, often on a temporary basis, to get them through this busy time of year. The number of jobs added by “holiday hiring” industries with strong holiday employment patterns was below average in 2016. The season’s holiday buildup was much smaller than usual among retailers, while the new leaders in holiday hiring are couriers and messengers (UPS, FedEx, etc.) and the postal service.
The 2016 Holiday Buildup

Oregon’s job buildup in industries with strong holiday employment patterns was 10,463 in 2016, which was less than the average buildup of nearly 11,400 since 2001. The “holiday buildup” is one way to measure holiday hiring activity. The holiday buildup table shows the net job gain in industries where employment grows during the holiday season and is cut soon after the New Year. Holiday buildups of the last decade ranged from a high of almost 15,000 in 2005 to a financial crisis-induced low of less than half that in 2008. The October through December jobs buildup in the holiday hiring industries that year fell to 7,071, just 6 percent more than September’s level and far below the historical average buildup of 10 percent.

The holiday hiring retail industries included in the first table are based on the March 2009 Bureau of Labor Statistics article Holiday Season Hiring in Retail Trade. Jobs at postal services (both private and federal) and couriers and messengers have been added to give a more complete picture of industries with strong holiday employment patterns.

Few industries had larger than average buildups in 2016. The 2016 and 2001-2016 average buildups for each industry are shown in the table. Couriers and messengers and postal services had very large buildups in 2016, doubling their average holiday buildup. No retail industry had a larger than average holiday buildup.

The largest buildup occurs at general and merchandise stores, which added 3,347 jobs in the closing months of 2016. That is some hefty holiday hiring, but it was lower than the average buildup in that industry. General and merchandise stores account for nearly one-third (32%) of the holiday buildup.

Increased online shopping means more jobs are being added in transportation industries during the holidays than in previous years. It also means traditional retailers are increasing the number of temporary workers in their distribution and fulfillment centers that serve online customers. For example, Target announced the need to hire 4,500 workers at distribution and fulfillment centers this season. That’s in addition to 100,000 seasonal workers Target will hire nationally for its traditional stores. In store workers will also be fulfilling online purchases using merchandise from stores, so the line between serving online customers and in-store customers is blurring.
Postal services and couriers and messengers deliver many of the packages purchased during the holiday season and their holiday workers account for about 29 percent of the total holiday jobs buildup. Private couriers and messengers delivered doubled the jobs in 2016’s holiday season than in a typical year, the largest buildup rate of these seasonal industries. See the article Couriers and Messengers, from Pony Express to Future Drones for more about the industry.

The U.S. Postal Service used to add more than 500 jobs in Oregon each holiday season. That number fell drastically starting in 2007, but has since recovered and returned to adding about 500 jobs during the holiday season.

Holiday buildups inevitably lead to corresponding post-holiday declines in the number of workers needed as businesses adjust back to the usual sales pace. As a group, the holiday hiring industries are growing at near the same pace as the overall economy. This suggests that some of the jobs added this season will stick around in 2018.

The Holiday Hires

The holiday buildup does not give a complete picture of holiday hiring because it only measures the net change in employment levels. Turnover rates among workers in holiday hiring industries are high, so there are more people who find a new job within those industries during the holiday season than are counted in the buildup.
Holiday hires in this article are workers who started a new job in one of the holiday hiring industries during October, November, or December with an employer they did not work for in July, August, or September. They may or may not have continued to work for that employer following the holiday season.

There were 34,800 people hired in Oregon’s holiday hiring industries during the fourth quarter of 2016, which was an increase over the prior year and very close to the seasonal average of about 34,600 since 2001. The number of holiday hires hovered just above 40,000 in the years leading up to the recession, but fell to 30,800 in 2008 and to 27,500 in 2009, according to data from the U.S. Census Bureau’s Local Employment Dynamics program.

Although the number of hires varies from year to year, the share of annual hires landing their jobs during the holiday season has remained stable over the last decade. Fourth quarter hiring accounted for about 36 percent of total hiring by holiday retailers during 2016 and about 59 percent of total hiring by private postal services and couriers and messengers (the number of holiday hires by USPS is not available from this data source). Workers hired by these industries may or may not stick around in their new job during the New Year, but there is a good chance many workers in the holiday hiring industries got their start during the holiday season.

2017’s Wish List

It’s difficult to know what future seasonal hiring patterns of retailers will be as consumers make more of their purchases online. Parcel deliverers will no doubt continue hiring holiday workers to deliver those extra packages to all the good girls and boys, but local stores may not need to hire as many holiday workers as in past years if their customers are doing less shopping in person.

We won’t know how this season’s holiday hiring compares with prior years until sometime in the New Year, but a peek at the employment forecast provides a hint about what the future will bring.

The December 2017 employment forecast from the Oregon Office of Economic Analysis expects Oregon’s retail trade employment to grow in the fourth quarter of 2017 by just 100 jobs more than the typical seasonal increase. The forecast is for the entire retail trade sector, not just the industries with a lot of holiday hiring, but the implication is that the holiday buildup will be average this year.