The January release of the Kronos Retail Labor Index report provides results for the December 2009 Index as well as a year-end recap of trends in the applicant population. The December Index level was the highest of 2009, at 4.02% (for every 100 applications received, 4.02 hires were made). This result appears to be driven by a continued decrease in applications (the lowest since August 2008) which outweighed a 7.1% decrease in hirings relative to a year ago.
December unemployment numbers from the Bureau of Labor Statistics show that while unemployment remained constant at 10 percent, the “underemployment” rate, which includes those who have given up looking for work and those employed part time for economic reasons, rose slightly from 17.2% to 17.3%. We will be watching Kronos application levels closely to see whether recent declines in application volumes are the result of discouraged unemployed workers giving up on applying, or whether they reflect early signs of an improving labor market.
Holiday 2009 recap. In reviewing the holiday hiring season, which typically is in full swing by October, some interesting dynamics emerged when we compared 2008 and 2009. September and October Index levels were far higher in 2008 than in 2009, with a new all-time low reached in September 2009 (2.58%), and with only a slight rebound in October 2009 (2.90%). These numbers reflect the extreme caution with which retailers approached the holiday 2009 season, after being burned by low sales and heavy discounting in 2008. However, a hiring surge in late November, combined with a decrease in applications, pushed the November 2009 Index above the November 2008 level. This trend evened out in December, with December 2009 and December 2008 Index levels at the same 4% level.
These Index patterns reflect overall trends in holiday season sales. In 2008, the extremely weak holiday sales surprised retailers; accordingly, hiring rates were relatively strong early in the season in September and October 2008. After this experience, and in light of sales projections, retailers held back on hiring in September and October 2009, planning to add staff on an as-needed basis. By November 2009, with retail sales at an adequate level - 1.3% higher than in November 2008, according to the Census Bureau - retailers were confident enough to add staff in the latter half of November; seasonal sales were weighted towards the end of the season, with December same-store sales posting a 2.8% increase over December 2008, according to the International Council of Shopping Centers.
2009 and the changing applicant pool. Our analysis of application data collected via the Kronos hiring system has revealed some interesting trends which reflect wider changes in the labor market and unemployment rates. Highlights include:
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