Very rough edit:
Most of the problems with this are in anatomy, pose and composition.
Anatomy:Santa's head looks freakishly small. This is partly because the hair at both sides of the face combines to be as wide as the face is. Widened face and narrowed hair.
Kids head is a little on the small size. Embiggened it.
Santa's left upper arm is far too long. Shortened it.
Santa's nose is very narrow. Widened it.
Hat is freakishly big. Depending on stiffness of fabric it shouldn't rise too much beyond hair level. Shrunk it to better fit head.
Pose:Both characters are holding their elbows up in the air which looks very uncomfortable. Relaxed their arms by lowering elbows to rest point.
Kid seems to be looking nowhere in particular while santa seems to be looking directly at the camera. Neither look very natural. Made them look at each other's faces.
Santa's and kids leg angles don't seem to fit the viewing angle. Levelled them out a ways.
Composition:The off-centre placement of santa and massive size of the sack confuse the focus of the image. Reduced size of sack and centred santa.
