Arkansas’ jobless rate remains steady ahead of holiday shopping season, but retailers seeing high turnover

Arkansas’ jobless rate held steady at 4% in October as retailers across the state continue hiring temporary and part-time help ahead of the holiday shopping season that traditionally begins on Black Friday, the day after Thanksgiving Day on Nov. 25.

Labor force data, produced by the U.S. Bureau of Labor Statistics and released Friday Nov. 18) by the Arkansas Department of Workforce Services, shows Arkansas’ seasonally adjusted unemployment rate for October at 4%, the same as in September and well below the year ago level of 5%.

Arkansas’ civilian labor force declined 2,173, a result of 1,805 fewer employed and 368 fewer unemployed workers. Today, there are 1,354,538 Arkansans working or seeking gainful employment as key employment data shows retailers across the U.S. are dealing with high turnover heading into the all-important holiday shopping season as workers seek better jobs.

According to a survey this week by Korn Ferry, retailers across the U.S. are seeing the highest churn rate among hourly stores workers since before the Great Recession. A survey of HR and compensation professionals at 66 retail organizations, representing more than $75 billion in annual revenue, shows nearly 38% of retailers said they’ve seen an increase in employee turnover since the beginning of 2016.

HIGH CHURN AMONG HOURLY AND DISTRIBUTION WORKERS THIS CHRISTMAS, RETAILERS SAY
The survey also finds that of all retail positions, hourly store employees have the highest turnover rate, with a 65% rate in 2016. That’s an increase from 57% in 2015. When considering retail distribution centers, the overall turnover rate in 2016 was 23%, compared to 21% in 2015.

While retail corporate positions saw the lowest turnover rates in the industry, the percentage was higher in 2016 (18%) than 2015 (15%).

“We haven’t seen retail turnover rates this high since before the great recession,” said Craig Rowley, senior partner of retail and consumer at Los Angeles-based Korn Ferry Hay Group. “Decreasing unemployment rates make competition greater, and as retail sales rise, retailers are hiring more people and increasing starting salary rates to lure employees away from their competitors.”

Of the positions that had the highest turnover, respondents cited “better opportunities” and “promotions” as the No. 1 reason for departures, followed by “more money” and a desire for a “move/geographic change.”

When asked for what retailers will be looking to do to curb turnover moving forward, “career pathing” and “training” were cited as the top focus areas, followed by “better communications on the employee value proposition” and “compensation packages.”

“Today’s retail industry is full of opportunity for people who are willing to work hard and who enjoy working with customers,” said Rowley. “To retain top employees, employers need to lay out a clear career path, as well as offer training to stay ahead of today’s omni-channel options, such as helping fulfill customer orders online. It’s critical that employees feel nurtured and that they feel part of the organization instead of just having a job.”

Retail hiring for the last three months of 2016 is expected to be about the same as last year’s 738,800 seasonal jobs as reported by Challenger, Gray & Christmas. The global outplacement consultant firm said in retail stores the number is stagnant but higher in warehousing and transportation as e-commerce takes a bigger share of the overall spend.

To date, Bentonville-based Walmart Stores Inc. has not disclosed its holiday hiring plan this year. Last year, the retail giant announced in September it would hire 60,000 for the holiday season.

Earlier this month, the U.S. economy added a steady 161,000 to employee rolls in October as the nation’s unemployment fell to 4.9% just four days before the nation’s presidential election. In addition, U.S. wages rose to the highest level in a year as average hourly earnings rose 0.4% from a month earlier to $25.92, up 2.8% from a year ago.

New Hampshire and South Dakota had the lowest unemployment rates in October at 2.8% each. Alaska and New Mexico had the highest jobless rates, 6.8% and 6.7%, respectively. In total, 18 states, including Arkansas, had unemployment rates significantly lower than the U.S. jobless rate of 4.9%, nine states and the District of Columbia had higher rates, and 23 states had rates that were not appreciably different from that of the nation.

ARKANSAS NONFARM JOBS UP BY 4,300
Arkansas’ closely-watched nonfarm employment in Arkansas saw a slight increase of 4,300 positions in October to total 1,237,800. Seven major industry sectors added jobs, while four sectors saw small declines.

Government jobs continued a seasonal increase with 1,900 new jobs as public school employment reaches full capacity. Jobs in educational and health services rose 1,700, mostly in health care and social assistance. The higher-waged professional and business services sector increased by 1,500 with most gains posted in administrative and support service.

Two months after the traditional Arkansas vacation season ended, leisure and hospitality lost 1,500 jobs as fewer workers are needed. A majority of the job losses occurred in arts, entertainment, and recreation (-1,000), state workforce officials said.

Compared to October 2015, Arkansas’ nonfarm payroll employment has increased by a strong 19,870 workers. Six major industry sectors posted growth, while three sectors declined. For the month, the Trade, Transportation and Utilities sector – Arkansas’ largest job sector – declined for the second straight month, losing 700 positions and now has an estimated 254,200 workers in the labor pool, compared to 254,900 in September and 254,300 from a year ago.

With school now in session, the Education and Health Services sector added a 1,700 jobs and now has 186,000 workers in the state’s tight labor pool, compared with 184,300 a month ago and 178,500 in the same period a year ago. This sector has seen steady growth in the past decade, with employment in the sector up 4.2% in the past year.

The government sector took another 1,900 workers in October as employees at public colleges and universities are back on the job. There are now 217,100 government workers in the state’s growing labor pool, compared to 215,200 in September and even with a year ago.

The construction sector continues to pick up momentum in the fourth quarter as an estimated 900 jobs were added in October. That sector now has 51,000 workers, compared to 50,100 in September and 51,400 in the same period a year ago. The sector is well off the employment high of 57,600 reached in May 2007.

Mining and logging, which includes the state’s oil and gas sector, saw a slight decline of 100 positions as drilling and well production activity in the Fayetteville Shale drops off again as natural gas prices ebb. There are now 6,400 mining jobs in Arkansas, down from 7,700 workers a year ago.

The fast-growing professional and business services, however, picked up another 1,500 workers in October, pushing yearly totals up to 145,900. Compared to a year ago, the white-collar service sector is up 3.3%, adding 4,600 higher paying jobs to the state’s economy.

The up-and-down manufacturing sector in Arkansas loss another 100 jobs in October and now has 153,700 blue collar workers. A year ago there were 155,200 manufacturing jobs in Arkansas, well-off peak employment of 247,300 in the sector in February 1995.