Last updated: July 2026
TL;DR: As of 2026, retail is squeezed from both sides: seasonal hiring is at a 15-year low while tariffs sit at their highest effective rate since 1947. You cannot out-hire a soft labor market or out-spend a margin squeeze, so adding headcount is the wrong lever. The shortfall most retailers feel is coverage at the right time, not bodies on the payroll, which makes it a scheduling problem before a hiring problem. Matching labor to demand takes three things working together: demand forecasting tied to the schedule, rule-driven scheduling, and clean time capture into payroll. Done right, the team you already have covers more of what matters, without more hours or more people.
If you run store operations or own the labor line on a retail P&L, 2026 has handed you a squeeze from both sides at once. There are fewer people to hire, and everything costs more. The instinct is to post more requisitions and push harder on recruiting. In this market, that instinct quietly fails.
Retail hiring has cooled to a level the industry has not seen in more than a decade, and the costs pressing on your margin are running at highs not seen in generations. You cannot out-hire a soft labor market, and you cannot out-spend a margin squeeze. So the question worth asking is not "how do we hire our way out of this," but "how do we get more out of the team we already have."
The answer, more often than not, is scheduling. Not more people. Better-placed people.
The squeeze is real, and it comes from both directions
Start with labor supply. The National Retail Federation expects retailers to bring on between 265,000 and 365,000 seasonal workers this year, the lowest level of seasonal retail hiring in fifteen years, down from 442,000 the year before. The NRF's read on the number is blunt: it reflects "the softening and slowing labor market." The broader data agrees. Hiring across the economy cooled through the spring, with April marking another month of fewer hires.
Now the cost side. Tariffs have pushed the average effective U.S. rate to its highest level since 1947. For a retailer, that lands as higher landed cost on goods, thinner margin per unit, and less room to raise prices on a shopper who is already trading down. Labor is one of the few lines you still control, and it is under pressure to deliver more without growing.
Put the two together and the reflex to hire harder looks worse. Adding heads is both harder to do and more expensive to carry than it was a year ago. The move is not to close the gap with headcount. It is to stop treating the gap as a headcount problem in the first place.
The gap is a scheduling problem before it's a hiring problem
Here is the part that gets missed. The shortfall most retailers feel is not a shortage of bodies on the payroll. It is a shortage of the right coverage at the right time. You can be overstaffed on a slow Tuesday morning and understaffed at Saturday's peak in the same week, in the same store, and feel both as pain: one shows up as wasted labor cost, the other as lost sales and burned-out staff.
That is a matching problem. When labor is matched to demand, the same number of people covers more of what actually matters, and the hours you were spending in the wrong places move to the right ones. The team you have goes further, not because anyone works harder, but because the schedule finally reflects the business.
Getting there takes three things working together. You forecast demand at the store and daypart level, so the schedule is built against what is coming rather than what happened last quarter. You schedule by rule, so hours, breaks, availability, and cost constraints are respected the first time instead of fixed after the fact. And you capture time cleanly on the way to payroll, so the hours you carefully planned are not quietly lost to manual reconciliation at the end of the week. Miss any one of them and the gains leak away.
Where WorkAxle fits
Once you accept that the gap is about matching labor to demand, the hard part is doing it across a real store network with real constraints. The design decision that settles whether it works is where the forecast, the labor rules, and the time record actually live. In WorkAxle we put all three in one place, so a schedule is built against demand and against your rules at the same time, and the hours that get worked flow to payroll already classified.
No second system, no week-end reconciliation to reclaim the hours you planned.
That is the mechanism behind the outcomes we see in margin-sensitive retail. A national retail pharmacy network cut the time it spent managing timecards by 74 percent and reached full return on investment in six to eight weeks. The savings did not come from adding people. They came from removing the manual work that sat between a planned schedule and a clean payroll run, which freed managers to spend their time on the floor instead of in a spreadsheet.
WorkAxle handles demand forecasting, scheduling, time capture and classification, and payroll preparation, and it connects to the payroll and ERP systems a retailer already runs, so the labor plan and the labor spend finally line up.
Frequently asked questions
How can retailers handle demand with fewer workers?
By scheduling to demand instead of to headcount. Most retailers do not lack people so much as they lack the right coverage at the right time. Forecasting demand by store and daypart, then building schedules that match it under your labor rules, lets the same team cover more of the hours that drive sales, without adding staff.
Is retail hiring really down in 2026?
Yes. The National Retail Federation projects seasonal retail hiring at its lowest level in fifteen years, 265,000 to 365,000 workers versus 442,000 the prior year, which it attributes to a softening and slowing labor market. Broader hiring cooled through the spring as well.
Does better scheduling actually reduce labor cost?
It reduces the waste in labor cost. When hours are matched to demand and time flows cleanly to payroll, you stop paying for coverage you do not need and stop losing planned hours to manual reconciliation. One national retail pharmacy network cut timecard-management time by 74 percent and reached full ROI in six to eight weeks by closing that gap.
What should a retailer look for in a scheduling system?
Three capabilities that work together: demand forecasting tied directly to the schedule, rule-driven scheduling that respects hours and cost constraints the first time, and clean time capture that hands classified hours to payroll without manual rework.
Related reading
- 5 Must-Have Features for Retail WFM
- The Case for a Cost-to-Serve Mindset in Workforce Management
- Gen Z and Fair-Workweek Laws Want the Same Thing From Your Schedule
The retailers pulling ahead this year did not out-hire a tight market. They made the team they already have go further. If your labor cost is climbing but your coverage still misses your busiest hours, a 30-minute assessment can map where your demand peaks, show where you are over and understaffed in the same week, and pinpoint where planned hours leak between the schedule and payroll.
Your stores, your demand, your numbers.
