Unwrapping Holiday Hiring

November 2, 2020

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 2019, the number of jobs added by “holiday hiring” industries with strong holiday employment patterns was lower than average. The season’s traditional holiday buildup was smaller than usual among retailers. The new leaders in holiday hiring are couriers and messengers (UPS, FedEx, etc.) and health and personal care stores.

The 2019 Holiday Buildup

Oregon’s job buildup in industries with strong holiday employment patterns was 10,105 (or 8%) in 2019, which was slightly lower than the average buildup of 11,170 (9%) 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 since 2001 ranged from a high of about 15,000 (13%) 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 9 percent. Holiday hiring in 2018 was close to the lows seen in 2008 and 2009 but has increased by 13 percent to 10,105 in 2019.
Couriers and Messengers Deliver Largest Holiday Buildup

Couriers and messengers had the largest buildup, adding 3,834 jobs in the closing months of 2019. Other industries with a large buildup included general merchandise stores (2,853), clothing and accessory stores (1,871), and sporting goods, hobby, and book stores (493).
Increased online shopping means more jobs are being added in transportation industries during the holidays than in the past. It also means traditional retailers are increasing the number of temporary workers in their distribution and fulfillment centers that serve online customers. 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. Their holiday workers account for about 39 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 2019’s holiday season (3,834 jobs) than the average buildup between 2001 and 2019 (1,795). Other industries with the fastest buildup rates were health and personal care stores and furniture and home furnishing stores. Health and personal care stores added 363 jobs in 2019. Furniture and home furnishing stores added 380 jobs from September to December 2019.

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 recovered and returned to adding more than 400 jobs during the 2018 holiday season. In 2019, however, the U.S. Postal Service added just a quarter of what it did the previous year at 110 jobs.

Bricks to Clicks

The data above may look scary to some, but slow holiday hiring could be attributed to the changing nature of retail. 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 with jobs at postal services (both private and federal) and couriers and messengers added to give a more complete picture of industries with strong holiday hiring patterns.

In the past 10 years, technology has advanced quickly and online shopping has expanded, impacting the economy greatly. Everything from groceries to holiday presents can be ordered online and delivered within days, if not hours (under normal conditions – the COVID-19 pandemic and sudden increase in online shopping has caused delays in 2020). It is highly possible that because more people are doing their shopping online, traditional “brick and mortar” retailers do not need to hire as much as they did in previous holiday seasons and industries more closely related with “e-commerce” are hiring more workers.

To analyze this, the traditional holiday hiring industries can be divided between brick and mortar industries and e-commerce industries, and a sector that has been booming in Oregon recently, warehousing and storage, can be added to the e-commerce mix. Industries in the warehousing and storage subsector are primarily engaged in operating warehousing and storage facilities for general merchandise, refrigerated goods, and other warehouse products. These establishments provide facilities to store goods.
When the warehousing and storage sector is added, the picture of holiday hiring looks completely different. In total, holiday hiring (the buildup of employment between September and December) looks steady from 2010 (post Great Recession) on, with holiday hires ranging from 10,298 in 2013 to 13,718 in 2019. What is really changing is the percentage of holiday hiring that falls in the brick and mortar areas as compared with the e-commerce areas. In 2001, 74.7 percent of holiday hiring took place in the sectors found in the brick and mortar category and by 2010, it represented 68.9 percent. However, in 2019 traditional brick and mortar holiday hiring represented only 43.4 percent, while e-commerce hiring had grown to 56.6 percent of all holiday hiring. Holiday hiring is still happening at similar levels as before, it just appears to be happening in different sectors.   
2020’s Wish List

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 consumers are more likely to make their purchases online in the wake of COVID-19, it is difficult to know what future seasonal hiring patterns of retailers will be. 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. However, traditional brick and mortar retailers may be offering more online shopping options and may still require more workers during the holidays, just in different occupations. As more online shopping takes place, warehousing and storage will continue to be important in holiday hiring.

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 2020 employment forecast from the Oregon Office of Economic Analysis (OEA) expects Oregon’s retail trade employment to grow in the fourth quarter of 2020 by just 1,000 jobs. OEA expects transportation, warehousing, and utilities to add just 100 jobs in the fourth quarter of 2020. These forecasts are for the entire retail trade sector and much more than warehousing and storage in the transportation, warehousing, and utilities industry, not just the industries with a lot of holiday hiring, but the implication is that the holiday buildup will be below average this year in these areas.