Unwrapping Holiday Hiring

by Felicia Bechtoldt

November 8, 2018

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. In 2017, the number of jobs added by “holiday hiring” industries with strong holiday employment patterns was close to average. The season’s holiday buildup was smaller than usual among retailers, while the new leaders in holiday hiring are couriers and messengers (UPS, FedEx, etc.), postal services, and health and personal care stores.

The 2017 Holiday Buildup

Oregon’s job buildup in industries with strong holiday employment patterns was 11,196 in 2017, which was close to 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 about 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 7,077, 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 this article 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.

Couriers and messengers had the largest buildup, adding 3,236 jobs in the closing months of 2017. Other industries with a large buildup include general merchandise stores (2,536 jobs), clothing and accessory stores (1,880), and sporting goods, hobby, and book stores (1,124).
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. The Oregonian reported that 24 companies are hiring seasonal workers in warehouses and stores across Oregon. 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 33 percent of the total holiday jobs buildup.

The private-sector couriers and messengers industry had the fastest buildup rate of these seasonal industries. The industry had more than twice the buildup in 2017’s holiday season (3,236 jobs) than the average buildup between 2001 and 2017 (1,603). Other industries with the fastest buildup rates were health and personal care stores and private-sector and federal postal services. Health and personal care stores added 600 jobs in 2007, nearly double the average of 338 jobs since 2001. Private-sector and federal postal services added 475 jobs in 2017, faster than the average of 333 jobs.

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 more than 400 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 2019.

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 34,300 people hired in Oregon’s holiday hiring industries during the fourth quarter of 2017. The number of hires was about the same as the previous year and was 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 27,400 in 2009, according to data from the U.S. Census Bureau.

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 more than a third of total hiring by holiday retailers and private-sector postal services and couriers and messengers during 2017 (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.

2018’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 kids, 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 September 2018 employment forecast from the Oregon Office of Economic Analysis expects Oregon’s retail trade employment to grow in the fourth quarter of 2018 by just 700 jobs. 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.

 


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