ANALYSIS - Retailers hiring on-demand this holiday season

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Struggling US retailers are very cautious about hiring part-time help this holiday season and have even set up lists of workers that -- almost like day laborers -- they will only call on at the last minute.

In a departure from previous years when they sought out temporary workers as early as October, many retailers will stay nimble this season and wait until they see customers actually walk into their stores.

"Retailers' biggest problem is trying to estimate what the sales activity is going to be and the customer flow ... when it will start," Mike Steinmetz, vice president/general manager of the Midwest unit of employment services firm Manpower said.

And thanks to the sky-rocketing unemployment numbers that translate into a larger pool of job applicants, retailers can pick and choose when that happens.

"Hiring managers are in the driver's seat," John Challenger, chief executive of global outplacement consultancy Challenger, Gray & Christmas said.

The latest US employment report showed higher-than- expected job losses in October and a worrying spike in the unemployment rate to 10.2 percent, the highest since 1983.

While many retailers have interviewed possible candidates already, they are putting them on a waiting list and planning to call them as the season heats up, Challenger said.

Retailers also can easily request extra hours from existing employees or bank on their "floater staff" or "on-call" workers -- people who have worked for them in the past -- to save on training and other hiring costs.

"It's pretty much on demand ... in many of the positions in retail this year," said Manpower's Steinmetz, who expects seasonal hiring this year to be below last-year's level.

Holiday hiring is off to a slow start, with employment in the retail sector showing a net gain of 63,500 jobs last month, said global outplacement consultancy Challenger, Gray & Christmas. The figure is based on data from the Bureau of Labor Statistics.

That was a slight improvement over October 2008, when retailers added only 59,100 workers.

Last year, retail employment grew just 384,300 between October and December, making it the worst holiday hiring season since 1989, when retailers added just 380,500 workers.

The retail sector shed about 8.9 million jobs in 2007 and 8.4 million jobs in 2008, according to the data from the Bureau of Labor Statistics.

The new approach of "last-minute" hiring might cause logistical issues for head hunters, but filling the requirements will not be a problem, given the economic times.

"There are times where literally at the end of a day we get an order for the next day," Steinmetz said.

According to workforce management company Kronos, retail holiday hiring is currently at its lowest since 2006, indicating retailers expect a slow holiday sales season.

"Labor is certainly the most adaptive resource that retailers work with," Robert Yerex, chief economist at Kronos said, adding that retailers have a lot more flexibility in this area, unlike inventory.

"If the season really starts to heat up around Thanksgiving, then it's possible we will see a spike," he said.

A few experts even expect retailers to keep their seasonal hires longer this year because a rise in gift card buying and the weak economy means more shoppers will do their buying in January, Challenger said.

And seasonal workers might be pretty cheap this year.

"They don't have to offer special bonuses or incentives as there is a lot of people looking for work right now," Yerex said.

So who is hiring this year?
Daniel Butler with the National Retail Federation said online retailers, dollar stores and the specialty retailers selling toys and electronic goods will lead the way.

While consumer electronics chain Best Buy Co Inc has increased its seasonal hiring this fall, regional player hhgregg Inc recently put on over 800 associates for the season.

Department store operator JC Penney Co Inc, whose holiday staffing is very similar to last year, said its stores typically add 10 percent to 20 percent to their normal staffing in the holiday shopping season.

Toys "R" Us Inc said it planned to hire about 35,000 seasonal employees in stores nationwide this season, equal to the total workforce hired by the toy retailer during each of the previous two holiday seasons.

As they try to put behind memories of the worst holiday shopping seasons in decades, many US retailers want additional hands to boost service on sales floor and to help distribute goods more quickly.

And this year, the focus is on hiring more customer-facing associates -- to help shoppers navigate faster through stores and get faster billing -- rather than beefing up security or filling back-end positions such as merchandising.

Many will also boost staffing at their call centers to stay on top of customer queries.

Consumer electronics companies such as hhgregg are even putting their seasonal hires through about a 100 hours of training to make sure customers are not disappointed when they seek help.

"Even though these folks are coming on for seasonal help, the customer that is coming in to spend a USD1,000 or USD1,500 on an LED TV still expect to have all their questions answered," Gregg Throgmartin, hhgregg's chief operating officer said.