Bain’s outlook on holiday hiring
November 30th, 2006, filed by Pat Fitzgibbons(Guest bloggers Darrell Rigby, head of global retail, and Kris Miller, head of North American retail, at consulting firm Bain & Co., weigh in on this year’s holiday hiring.)
Despite a healthy overall job market, retail holiday hiring is expected to be flat or even slightly below last year’s approximately 630,000 temporary workers. Most of the holiday jobs will be at the register and in the aisles restocking shelves. But, because of the anticipated 22 percent to 25 percent growth in online sales, this year should see more employees in distribution and fulfillment centers.
We attribute this year’s flat growth to caution in seasonal outlooks, and to increased employee efficiency. Retail sales per employee have been climbing at a rate of $1,000 per year – from about $17,000 in 2002 to $21,000 in 2006.
Technology helps drive this efficiency. Here are a few of the things Bain’s Retail Practice has seen out there:
• Better point-of-sale data is helping retailers analyze customer shopping patterns and forecast labor needs more accurately.
• Self-checkouts are improving retail employees’ productivity in some retail categories. We’re seeing the greatest benefits at grocery stores and big-box retailers — stores that have multiple checkout lanes and high transaction volumes.
• Automated vending machines sell everything from cosmetics to iPods with the swipe of a credit card.
• Kiosks have also started to enter the mix of tools retailers use to serve customers more efficiently. We’re seeing retailers adopt kiosks that allow customers to find and print out coupons, look up wedding and baby registries, find prices for items in the store, and order items not in the store.
Of course, improved productivity and reduced hiring are both good news for retailers’ operating margins.
But, we always advise retailers to stay flexible in their hiring plans. If sales volumes pick up more than expected later in the season, customers could be turned off by long lines or poor service. And bad impressions during the holiday season last into the new year.
