To trim costs ahead of a recession, retailers are hiring fewer holiday workers — and driving burnout

After two holiday seasons of shoppers avoiding crowds, the retail sector is finally anticipating a flood of foot traffic this year. But hiring managers, fearful of a possible recession, are pulling back on seasonal staffing just when they may need it most.

Despite 85% of retailers expecting an increase in holiday shoppers this year, according to recent data from staffing insights platform UKG, there has already been a 5% decline in total retail shifts worked compared to the same time in 2021. That's causing higher levels of burnout in holiday hires before the season has even really begun.

"Retailers have to find balance in how they're trying to meet their sales goals and customer service while remaining cautious about what's coming ahead," says Rob Klitsch, marketing director for retail and hospitality at UKG. "They're caught between a rock and a hard place. They have been challenged to attract and retain talent, but they're also thinking well ahead into 2023 and trying to be cautious to not bring on too many people only to have to lay them off, or to find themselves in a challenging situation to meet profitability goals." 

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Over the years, the retail holiday season has grown as more and more consumers have begun their holiday shopping earlier in an effort to beat the craze. As of now, it spans approximately three months according to Klitsch, beginning in October and going through the end of December. Nearly 20% of the employees scheduled to work those hours will be seasonal or on-demand workers, according to UKG. Yet the reluctance to hire in the face of hard economic times has still stunted employers' preparations. 

In fact, one in 10 retailers expects to be understaffed five days a week minimum, and one in three is preparing to be short-staffed "most weekends." The staffing shortage is not only anticipated to affect customer experience — 84% of retailers say customer expectations today are higher than what their stores can deliver in terms of service — but also how holiday employees are being treated. Nearly a third of retailers said store managers quit in the past 30 days because they were mistreated by customers. 

"​​When you're not staffed up to where you likely should be to have your labor optimized to meet consumer demand, it just puts more stress on those that are working in stores," Klitsch says. "[Retail employees] can only take so much and it's causing them to leave either because they have new work or even without work because [they feel hopeful] they will find new work." 

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Some have already begun to branch out. According to a new Jobcase survey, 58% of workers in customer-facing jobs plan to take on additional work during the holidays, or are considering additional work as a temporary or seasonal employee with someone other than their primary employer — up from only 38% in 2021. 

And while being cautious about spending in the midst of economic uncertainty is smart, many employers can't risk losing any more talent. If employers can't find the means to boost the number of staff instores, Klitsch suggests they prioritize employee satisfaction. This means being transparent and flexible about schedules, implementing early access to earned wages and adding more robust benefits for their hourly employees — both full-time and part-time.

"Retailers have to listen now," he says. "The next few months are about listening and adopting strategies and investing in technology that promotes a more elevated experience for those workers."