How AI Can Make Up for Lean Holiday Hiring

There may be fewer elves in the workshop this holiday season.

With holiday hiring projected to hit its lowest level since 2009, retailers are bracing for slim reinforcements. Consumer sentiment has been wobbly at best recently, however, experts still predict modest growth in holiday spending this year. Therefore, retailers will need to be exceedingly strategic with their leaner holiday teams to meet projected demand.

Even if they have room in their budgets for extra headcount, retailers should focus on optimizing their existing workforce to succeed this holiday season. This will require plugging efficiency drains and maximizing the value of each shift, but also making sure employees’ needs are met so they remain on staff throughout the season.

Retailers can successfully navigate the holidays with a leaner staff by employing artificial intelligence. Across the full spectrum of workforce management, AI can help retailers address their most pressing hourly worker challenges, from optimizing shift coverage based on performance and precise demand forecasting to employee engagement.

Improving Demand Accuracy

Projected demand is the guiding star of automated labor management: accurate forecasts ensure efficient shifts while increasing the likelihood that employees will get their preferred schedule.

AI improves forecasts by ingesting vast amounts of data from various critical touchpoints, quickly recognizing patterns and distilling those trends into concrete predictions. The most accurate forecasts start with high-quality, diversely sourced data. Models should be retrained regularly and fed up-to-date information.

Accurate demand predictions do more than simply help the bottom line. They prevent workers from being overburdened and stretched too thin, ensuring higher productivity and better quality of service throughout the holiday season.

Making Every Shift Matter

For many retailers, the holiday season is their biggest revenue-driver, and this year the stakes are even higher. The perfect storm of tight consumer pocketbooks and smaller labor budgets means that every shift has a magnified impact on sales targets.

Scheduling systems that use AI allow retailers to optimize labor on a shift-by-shift basis. The algorithms that create schedules and long-term labor plans can easily accommodate the myriad influencers that govern shift makeup in ways that legacy tools and manual methods cannot.

Accounting for these various parameters, AI automatically matches available workers to open shifts. These systems empower workers to set their schedule preferences; they’ll also notify workers of available shifts so they can pick up and swap at will. The result is an agile, flexible labor strategy, ensuring proper coverage to meet demand while giving employees the flexibility they desire.

Now is not the time to lose seasoned employees. The ability to set their schedule preferences will keep current staff engaged and more likely to stay on board. There will be high-demand shifts (e.g., Black Friday) where retailers may need to mandate a full team presence, but outside of these instances, employees should be able to enjoy gig-like flexibility in their schedules.

AI is also expanding the definition of what constitutes an “optimal” schedule. With the right data, retailers can build schedules based on employees’ skills and productivity levels. This way, they can strategically staff their highest performers at peak times, or ensure that no shift is left without a strong team member to drive topline revenue.

The use of AI for labor optimization can help retailers weather every season of uncertainty — not just a potentially difficult holiday. Today’s retailers need new labor models for a shifting market, and AI systems make these models possible, ensuring cost savings without sacrificing productivity or employee experience. As retailers lean into AI this holiday season, they're laying the groundwork for long-term resilience.

Michael Spataro is senior vice president, partnerships and employee value solutions at Legion Technologies, a workforce management platform that maximizes labor efficiency and employee engagement simultaneously.