Retailers anticipate a busy holiday season but face significant staffing challenges, according to a survey released Friday by UKG, a workforce management software company.
The sixth-annual Retail Holiday Hiring Survey found 73 per cent of U.S. retail executives and frontline managers expect higher sales than last year, while 69 per cent forecast more in-store shoppers. However, 78 per cent say they have struggled to fill labour gaps in the past 60 days, according to the survey.
About six in 10 retailers began holiday hiring in September or earlier, according to the survey. One in four waited until October, which the company suggests may prove too late in a tight labour market.
The survey found 77 per cent of retailers expect hiring challenges this holiday season, and 83 per cent anticipate understaffed stores at least two days per week during the season.
Customer service at risk
Staffing shortages could lead to longer wait times for customers, according to 38 per cent of respondents. Another 29 per cent cited drops in customer satisfaction, and one in three managers said they would pull double duty to cover open shifts.
“In today’s tight labour market, retailers need to hire earlier and smarter,” said Heidi Harman, senior industry principal for retail and hospitality at UKG.
Turnover compounds staffing woes
Nearly half of retailers say turnover increased in the past year, according to the survey. Each week, 19 per cent lose at least one hourly worker and 11 per cent lose a store manager.
Pay and flexibility remain the leading drivers of retail-employee attrition, according to UKG.
AI adoption accelerates
The survey found 86 per cent of retail leaders say artificial intelligence is boosting workforce efficiency. However, the same percentage say AI could be better used for hiring and labour management.
Retailers report using AI for hiring, onboarding, tracking assigned tasks, scheduling, forecasting labour needs, approving payroll and reviewing data for business decisions.
Looking ahead to 2026, 40 per cent of U.S. retailers believe AI-powered tools for HR, payroll and workforce management are the most important technology investments, according to the survey.
“Our research shows nearly two-thirds of employees view AI as a threat to their jobs,” said Harman. “Retailers must be transparent about using AI to enhance — not replace — frontline employees. The best results happen when AI works in service of people.”
A separate UKG study found 77 per cent of retail associates report feeling burned out at work. However, frontline employees using AI at work report lower burnout levels than those not using AI, according to the company.
