Annual UKG Holiday Hiring Survey: Retailers Brace for Busy Holidays, Staffing Challenges, and Growing Dependence on AI

About 6 In 10 retailers (59%) began holiday hiring in September or earlier

LOWELL, Mass.--(BUSINESS WIRE)--With eight weeks to go before Black Friday, retailers are gearing up for busy stores while bracing for staffing struggles this holiday shopping season. That’s according to the sixth-annual Retail Holiday Hiring Survey of U.S. retail executives and frontline managers by UKG, a leading global AI platform for HR, pay, and workforce management. The survey also reveals that retailers are increasingly leaning on AI-guided workforce software solutions to overcome labor shortages, drive productivity, and deliver better customer experiences.

Retailers Expect More Sales, More Shoppers, and More Holiday Hiring

In a positive trend for the economy, among retailers polled in the UKG survey:

• 73% anticipate higher sales than last holiday season;
• 69% forecast more in-store shoppers than in 2024; and
• 67% plan to increase hiring to keep pace.

Many retailers have already acted: 59% began holiday hiring in September or earlier. However, 1 in 4 waited until October, which may prove too late in a tight labor market.

Labor Shortages Threaten the Holiday Rush

Ahead of the holidays, 78% of retailers say they’ve struggled to fill labor gaps in stores the past 60 days. Moreover:

• 77% expect hiring challenges this holiday season; and
• 83% anticipate understaffed stores at least two days per week during the season.

Retail leaders warn that staffing shortages could undermine customer service, causing longer wait times for customers (38%), drops in customer satisfaction (29%), and 1 in 3 managers to pull double duty to cover open shifts.

“In today’s tight labor market, retailers need to hire earlier and smarter,” said Heidi Harman, Senior Industry Principal for Retail and Hospitality at UKG. “AI-powered workforce solutions can help predict demand, optimize scheduling, and give frontline associates the flexibility and autonomy they value.”

AI as a Strategic Solution for Retailers

For the holidays and beyond, the UKG survey underscores how central AI has become in retail operations. Nearly nine in 10 (86%) retail leaders say AI is boosting workforce efficiency today — though 86% also say AI could be better leveraged both for hiring and labor management. Overall, retailers report using AI for hiring; onboarding; tracking assigned tasks; creating, viewing, and adjusting staff schedules; forecasting labor needs; approving payroll; and reviewing data and reports to make business decisions related to hiring, scheduling, and inventory.

Looking ahead to 2026, 40% of U.S. retailers believe technology that offers AI-powered tools for HR, payroll, and workforce management are the most important investments retailers can make to improve technology.

Experts caution that transparency and communication are key to successful AI initiatives.

“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.”

Burnout and Turnover Add to Holiday Pressure

Beyond staffing gaps, retailers continue to face mounting workforce challenges:

• Nearly half of retailers say turnover increased in the past year; and
• Each week, 19% lose at least one hourly worker and 11% lose a store manager.

Pay and flexibility remain the leading drivers of retail-employee attrition.

Burnout is also a contributing factor to retail-worker quit rates. In a separate, forthcoming research report by UKG on frontline employee sentiment across 10 countries, 77% of retail associates report feeling burned out at work. Yet, the study also finds frontline employees using AI at work report lower burnout levels than those not using AI.

“With more shoppers, higher sales expectations, and persistent labor challenges, AI-driven workforce strategies are essential for retailers this holiday season — and a powerful tool to reduce turnover and ease employee burnout,” concluded Harman.

Download the UKG 2025 Retail Workforce Report to read more about this season of opportunity — with higher sales and busier stores — and for ideas to help overcome retail’s persistent labor shortages and workforce challenges.

About UKG

UKG is a leading global AI platform for HR, pay, and workforce management. Unifying award-winning solutions with the world’s largest collection of workforce data and people-first AI, UKG delivers unrivaled insights into today’s workforce, helping organizations in every industry turn data into decisions that elevate productivity, culture, and the customer experience. Trusted by more than 80,000 organizations across 150 countries, tens of millions of employees — from small businesses to global enterprises — use UKG every day.

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