Holiday Hiring Slumps To New Low: Just 7% of Small Biz Employers Seek Seasonal Help

TREND TRACKER | HOLIDAY HIRING SMALL BUSINESS DATA | BOSTON, MA -- October 13, 2022: Given ongoing and cumulative economic challenges, small businesses are scaling back their seasonal hiring to a new low. Just 7% of small business employers across all industries are trying to employ holiday help, down a whopping 29% from last year's seasonal hiring rate of 36%.  

This is just one of the major findings uncovered by Alignable's 2022 Holiday Hiring Poll, which also shows that 54% expect to make less in Q4, 2022 than they did during Q4, 2021. 

And for most poll respondents, recessionary trends, high labor costs, the continued difficulty finding the right staffers, and lower expectations for revenue were all cited as reasons to hold back on holiday hiring. 

The poll was conducted among 4,415 randomly selected small business owners from 9/16/22 to 10/12/22. Other data shared in this report came from past polls among at least 25,000 additional small business owners. 

Retailers Are Scaling Back, Too

At this time of year, all eyes are on Main Street merchants like retailers, restaurant owners, and others with brick-and-mortar operations that need a real lift during Q4. And the holiday hiring patterns emerging around these small businesses is even more alarming than the overall hiring slump.

Nearly half (46%) of retailers are not hiring anyone for the rest of the year, citing rising labor costs, the difficulty of recruiting the right staff, other expenses going up, and other recessionary concerns. 

Though many retailers staff up for the holiday season in more normal years, only 15% of small, Mom & Pop retailers are hiring temporary staff right now, and 1% are laying people off. They have cut their holiday hiring in half, compared to 2021, when 32% aimed to employ extra staff for the holidays. 

Overall, 46% of retailers aren't hiring anyone else (seasonally or permanently) for the rest of the year, as they tell us that they just don't have the revenues to cover these people.

Restaurants Downshift Holiday Hiring 

And the numbers for restaurants are even more mind-boggling. Through restaurants have been struggling to staff up to the right levels for over a year, the combination of inflationary pressures bearing down on them has forced a more conservative approach to holiday hiring. 

At the beginning of Q4, 2021, 56% of restaurant owners told us they planned to staff up significantly. Now, a year later, that figure is a meager 17% -- down 39% in 12 months. 

Drilling into the restaurant situation even more deeply, 48% of all restaurant owners taking our poll said they're not hiring anyone -- seasonal hires or permanent hires for the rest of the year, again, because their revenues won't support it. And 8% are laying people off. 

Further supporting recessionary behavior, it's important to note that 43% of all B2C businesses (including retailers and restaurants) have reduced the quantity of inventory and supplies they ordered for the holiday season, compared to what they purchased last year. 

Obviously, this reflects the figure mentioned earlier that 54% expect to earn less this year than last year. 

Other Industries Are Hurting, Unable To Afford More Help

Reviewing this chart, it's apparent that the holiday hiring slump is not confined to retailers and restaurants. 

Transportation is the category that's hiring the most temporary workers for the holidays at 25%, but 44% have paused all hiring and 6% are even laying off workers. 

The agriculture sector has been hit hard by many months of drought, so their hiring patterns right now are some of the most extreme in our survey. 

In this sector, 11% are hiring temporary holiday workers, and 33% are seeking permanent workers. But a whopping 56% are in the midst of a hiring freeze, because they can't afford to cover the labor costs. 

Of that group, 22% are laying off people. In this study, this sector is experiencing the highest percentage of layoffs across the board.

Other categories with lower percentages of holiday hiring include: travel (8%), construction (7%), real estate (6%), manufacturing (5%), automotive (4%), and finance (3%).

Shifting Gears To Hiring Freezes For Permanent Positions 

As we continue to examine the insights from this poll, we're also seeing that hiring freeze rates for permanent positions have gone up again, this time from 63% in August to 67% in October. 

The furniture category has been hit very hard by inflation and recessionary worries, as many consumers cut back on non-essential purchases when they need to tighten their belts -- and tables, chairs, TV racks, and beds top that list among many buyers. 

That's why it's no surprise that 71% of small businesses in the furniture sector have called it quits (for now) in terms of bringing in permanent workers. In fact, none of those taking the poll were hiring even part-time for the holidays and 14% were laying off staff.

Even the majority of SMBs in finance -- 68% -- have pulled back on adding any staffers, in fear of more recessionary times ahead. 

This number is remarkable, as these small business owners in accounting and related professions really have their finger on the pulse of what's going on economically and almost seven out of 10 say it's time to hold off. Among this group, 4% are laying off team members and only 3% are conducting holiday hiring. 

Salons, Travel, & Manufacturers

Others worth highlighting on the chart above that we have not already mentioned include: 

• 64% of salon and barber shop owners
• 52% of the travel and lodging professionals, and 
• 45% of manufacturers who've put recruiting for permanent staff on hold.

While these are brow-raising to say the least, looking at how small businesses in different states and provinces are reacting to the pressures of the upcoming holiday season continues to paint a picture of hesitation and economic exhaustion. 

Sure, most hope Q4 will give them a much-needed boost, but most are also scaling back their expenses to shield themselves from potential shutdowns and disappointing consumer or client behavior.

States & Provinces Brace For Less Revenue Than Q4, '21

As noted above, 54% of all small businesses in the U.S. don't expect to make more this quarter than they made in Q4, '21. 

And as this chart shows, many of the larger states in our poll show that the majority of their small business owners are adopting a conservative stance when it comes to hiring permanent help. 

This "wait and see" attitude is seen among small business owners in the following states: 

• 68% of those in Massachusetts
• 65% in California
• 63% in Michigan
• 62% in Arizona and New York
• 60% in Florida
• 57% in Illinois, New Jersey, and Ohio
• 52% in Pennsylvania, and
• 51% in Texas. 

The three states with the highest layoff rates are Arizona (10%), California (9%), and Ohio (9%).

Meanwhile, the states with the highest rates for holiday hiring -- again exhibiting a tentative approach -- were Colorado (18%), Georgia (17%), and Massachusetts (11%).

Hiring In Canada Is A Bit Better

As for Canada, there's a nice drop in the percentage of small businesses experiencing hiring freezes.

In August, it was 59%, and now it's 48%, down nine percentage points. 

Layoff rates are the same -- 4%. 

And 13% in Canada are hiring for the holidays, six percentage points higher than the U.S. 

Looking at the provinces, there's quite a wide range of hiring patterns emerging:

• Ontario -- 39% are not hiring at all, 4% are cutting back their staffing, and 17% are conducting holiday hiring.
• British Columbia -- 42% are having hiring freezes, 5% are laying workers off, and 11% are hiring temporary workers for the holidays. 
• Alberta -- 60% are refraining from bringing extra staff on, 7% have instituted layoffs, and 13% are hiring only for the holidays.

To see more specific data from Alignable's 2022 Holiday Hiring Report related to additional industries, states, or provinces, please contact me at chuck@alignable.com. 

To review past poll results, go to the Alignable Research Center. 

About The Alignable Research Center

Alignable is the largest online referral network for small businesses with 7 million+ members across North America. 

We established our research center in early March 2020, to track and report the impact of the Coronavirus on small businesses, and to monitor recovery efforts, informing the media, policymakers, and our members.