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This holiday season, more applicants compete for fewer jobs

This is the time of year when retail jobs are supposed to be as plentiful as holiday cheer, when stores gear up for the Christmas rush by filling their sales floors with college students, moonlighters and anyone else looking to shore up their income.

But no one is feeling very jolly this year.

Faced with plummeting sales and spooked shoppers, retailers have cut back on holiday hiring as their pool of applicants is swelling with those who have been laid off from other industries. About 272,000 retail jobs were open at the end of September, according to government data released last week, down 24 percent from the same month last year. Those numbers are expected to drop further as retailers cut back on opening new stores and close those that don't perform well.

"It's bleak on both sides," said K.C. Blonski, director of travel, leisure and retail markets for consulting firm AchieveGlobal. "Retailers are looking at the cost of adding to their labor pool. The jobs are little and far between."

Even those who have jobs are not unscathed. In the Washington, D.C., area, managers at restaurants say they not only are reducing staff through attrition, but they are also cutting hours. Some servers say they are making fewer tips because fewer people are dining out and those who do have become more stingy.

For Rick and Nina Ivey, owners of 15 Virginia Barbeque restaurants, the contracting economy means a halt in hiring even though a flurry of people in their 30s and 40s have asked about entry-level jobs. For 18-year-old Megan Waters of Annapolis, Md., it means applying at 14 stores before landing a job at a burrito chain. And for a national retailer like Best Buy, it means nearly 1-million applicants for no more than 20,000 seasonal jobs, a 20 percent increase in applicants over previous years.

The national unemployment rate reached 6.5 percent in October, according to government data. Some analysts project it will climb to 7.3 percent next year after hovering between 4 and 5 percent for about three years. Some 1,330 mass layoffs in the third quarter affected nearly 220,000 workers — and leave many of those to turn to the retail and restaurant sector to make ends meet.

"Typically in a down economy, there are definitely more applicants," said Dan Butler, vice president of merchandising and retail operations at the National Retail Federation, a trade group. "For retailers, it's good to have more applicants because you can be sure that you're getting the best possible candidate. But they're not going to hire more."

Toys "R" Us said the applicant pool for its 35,000 seasonal positions is larger and more qualified than in previous years. Outdoor retailer Bass Pro Shops said roughly 3,500 people applied for 300 jobs at a store that will open in Alabama this week. It has seen increased interest in its 1,500 holiday jobs. Best Buy store manager Robert Delissio said this year many applicants have shown up at his D.C. store with professional resumes in hand. He has hired between 35 and 45 people so far.

"I'm a little bit more selective now than I would normally have to be," he said.

Xina Eiland, president of Spa O and a public relations firm in D.C., said she interviewed about 10 people in the summer for a $300-a-week entry-level assistant position but got few takers.

"They wanted more hours and didn't like the job description," said Eiland, who ultimately hired a college graduate who had lost her job at a magazine.

But in the past few weeks, Eiland said, about five people who rebuffed her in the summer have called back about the job. One, she said, included a woman living in California who sought to telecommute.

They said, " 'My job got downsized. Are you still looking for an assistant?' " she said. "I told them I'm using somebody now, but if anything opens up I'd let them know."

The job market is unlikely to improve before the holiday season ends. The retail sector added about 65,900 jobs last month, 19 percent below last year and the smallest October figure since 1991, according to outplacement consulting firm Challenger, Gray & Christmas. Chief executive John Challenger said he doubted November would produce a significant gain.

"This could end up being one of the weakest holiday hiring seasons in nearly two decades," he said.

Dan Russell, vice president at Aon Consulting, which works with several big-box and specialty retailers, said retailers traditionally have been wary of job seekers from outside the industry. They worry applicants may be overqualified for the position and leave quickly, he said.

Butler said pay expectations also may not jibe with reality. The average retail wage was $11.79 per hour with an annual salary of $24,530 in 2007, according to data from the Bureau of Labor Statistics. The national average for all occupations was a $19.56 hourly wage and $40,690 annual salary.

And many professionals, accustomed to sitting in ergonomic desk chairs, don't realize the physical stamina required to stay on their feet eight hours a day.

"A lot of people underestimate that it is a lot of work," Butler said.

This holiday season, more applicants compete for fewer jobs 11/22/08 [Last modified: Tuesday, November 25, 2008 3:03pm]
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