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With eight weeks until Black Friday, U.S. retailers are preparing for bustling stores amid anticipated sales growth, but face persistent staffing shortages that could hinder customer service, according to the sixth-annual Retail Holiday Hiring Survey by UKG, a global AI platform for HR, payroll, and workforce management.
Retailers surveyed by UKG express optimism for the holiday season, with 73% projecting higher sales volumes than the previous year and 69% expecting a rise in in-store foot traffic over 2024 levels. To meet this demand, 67% intend to ramp up hiring efforts. Proactive measures are evident, as 59% initiated seasonal recruitment in September or earlier, though 25% delayed until October, potentially complicating talent acquisition in a competitive labor market. This surge in shopper activity underscores the need for robust staffing strategies to maintain operational flow during peak periods.
Staffing challenges remain a critical concern, with 78% of retailers reporting difficulties filling store positions over the last 60 days. Looking ahead, 77% anticipate similar hurdles this holiday season, and 83% expect understaffed shifts at least twice weekly. These gaps risk eroding customer experiences, including extended wait times cited by 38% of leaders and declining satisfaction noted by 29%. One in three managers may resort to covering extra shifts, exacerbating fatigue. “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 is emerging as a cornerstone for retail workforce management, with 86% of leaders affirming its role in enhancing efficiency across hiring, onboarding, task tracking, scheduling, labor forecasting, payroll approvals, and data-driven decisions on staffing and inventory. Despite this, the same proportion believes AI's potential in hiring and labor optimization remains underutilized. For 2026, 40% identify AI-integrated HR, payroll, and workforce tools as the most vital technology investment. Transparency is essential for adoption, as experts emphasize communicating AI's supportive role to alleviate fears. “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.”
Compounding staffing issues, nearly half of retailers report rising turnover over the past year, with 19% losing at least one hourly worker weekly and 11% a store manager. Pay and schedule flexibility drive most exits, while burnout affects 77% of retail associates per UKG's forthcoming global study. Notably, employees using AI report lower burnout, highlighting technology's mitigating potential. “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.
These insights position AI as a transformative ally for retailers, enabling smarter hiring, efficient operations, and improved employee well-being to capitalize on holiday opportunities while mitigating risks.
Download the UKG 2025 Retail Workforce Report
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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