Unwrapping Holiday Hiring

November 15, 2021

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 2020, the number of jobs added by “holiday hiring” industries with strong holiday employment patterns was higher than average. The season’s traditional holiday buildup was larger than usual among retailers. The new leaders in holiday hiring are couriers and messengers (Amazon, UPS, etc.) and general merchandise stores.

The 2020 Holiday Buildup

Oregon’s job buildup in industries with strong holiday employment patterns was 13,325 (or 11%) in 2020, which was higher than the average buildup of 11,270 (9%) from 2001 to 2019. 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% more than September’s level and far below the historical average buildup of 9%. Despite the acute onset of the pandemic recession in April and May 2020, holiday hiring in 2020 was 19% higher than the average from 2001 to 2019. This may be surprising to some, but thanks to federal relief spending aimed at stabilizing the economy, personal income was up 6.6% nationally over the year and up 8.0% in Oregon. Increased income likely bolstered the demand for holiday-related goods and services, which translates to an increase in demand for workers.
Couriers and Messengers Deliver Largest Holiday Buildup

Couriers and messengers had the largest buildup, adding 5,013 jobs in the closing months of 2020. This was 31% higher than the 3,834 jobs the sector added in 2019 and highest number on record going back to 2001. Given the nature of the COVID-19 pandemic, it’s unsurprising that the demand for delivery surged to new heights, as people did more of their shopping online than in previous years. Nonstore retailers, which includes online retailers, added the largest number of holiday workers in Oregon since 2013 at 970. Other industries with a large buildup in 2020 included general merchandise stores (2,134), and clothing and accessory stores (2,083).
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% 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 2.5 times the buildup in 2020’s holiday season (5,013 jobs) than the average buildup between 2001 and 2019 (1,795). The pandemic added to the demand for deliveries during the holidays. Other industries with the fastest buildup rates were miscellaneous store retailers and health and personal care stores. Miscellaneous store retailers added 687 jobs from September to December 2020. Health and personal care stores added 521 jobs during the same period.

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. 2020 hiring was equally weak at 117 jobs.

Bricks to Clicks

The data above look at traditional holiday hiring industries, but the nature of retail has experienced changes in recent years. 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 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 over the long term. 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 14,488 in 2020. 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, 75% of holiday hiring took place in the sectors found in the brick and mortar category, and by 2010 it represented 69%. However, in 2019 traditional brick and mortar holiday hiring represented only 43%, while e-commerce hiring had grown to 57% of all holiday hiring. In 2020, holiday hiring occurred nearly equally in brick and mortar and e-commerce industries.
2021’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 the ongoing COVID-19 pandemic continues to influence consumption patterns and 2021 has brought about the resurgence of a tight labor market, 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, and traditional brick and mortar retailers may be offering more online shopping options and may still require more workers during the holidays. As more online shopping takes place, warehousing and storage will continue to be important in holiday hiring. However, employers may not be able to hire as many workers as they would like to given the competitive labor market.

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 2021 employment forecast from the Oregon Office of Economic Analysis (OEA) expects Oregon’s retail trade employment to grow in the fourth quarter of 2021 by just 1,300 jobs. OEA expects transportation, warehousing, and utilities to remain flat in the fourth quarter of 2021. 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.

Are You Hiring?

If you’re an employer looking for advice on hiring and retaining workers, read economist Gail Krumenauer’ s article Recruitment and Retention in a Tight Labor Market.