Add CategoryThe retail sector has been hard hit by job losses in recent weeks, as businesses look to cut costs ahead of a challenging year, when consumers are expected to rein in discretionary spending. Wesfarmers has let go of 100 employees in its e-commerce business Catch, with the headcount in some departments reduced by up to 30 per cent, while New Zealand’s The Warehouse Group has cut 190 jobs in its support office, and e-commerce giant Ebay has cut 500 jobs worldwide. The online marketplace
’s CEO Jamie Iannone said the decision was made after considering the effects of the “current macroeconomic situation around the world”. This spate of redundancies isn’t confined to retail. Tech giants such as Alphabet, Meta and Microsoft have also announced sweeping job cuts in recent weeks after less-than-expected results. In some cases, businesses are simply returning to staffing levels pre-pandemic. It’s a cycle we’ve seen play out before: when times are hard, businesses cut back on staff to save money; when times are better, they rehire. But does it still hold true? According to Werkling founder Michelle Fotheringham, the nature of employment has changed since the pandemic began, and it might not be so easy for businesses to fill roles the next time they’re looking to expand. A ‘shortage’ of talent All across the business sector, Fotheringham argued, businesses have been struggling to fill the gaps left by team members who quit their jobs during Covid. The talent shortage is a reflection of the way more people want to work today, and could potentially break the cycle of firing and hiring that businesses are used to. “The whole idea of job security is changing,” Fotheringham told Inside Retail. “We’ve always looked at a permanent job as the most secure form of income. But is there really such a thing as a permanent job when you see these fluctuations in the market? “Good talent is hard to find regardless of where in the cycle you’re at, but the way people want to work is starting to look different.” For example, more than half of the US workforce is expected to be engaged in the gig economy by the end of 2027, according to the US Bureau of Labor Statistics, and while the image conjured by the term ‘gig economy’ is often one of underpaid delivery drivers, the reality extends much further than that. “There’s two different ends to the gig economy,” Fotheringham said. “There’s a more vulnerable end that absolutely needs protection… but at the other end there are highly-skilled professionals that have typically had long and successful corporate careers that are realising they don’t want to do that anymore.” These workers are more project-based, Fotheringham said, and are instead focused on creating a portfolio of work across multiple brands, rather than being tied to one in particular, that can then be leveraged to get more work, and so on. Leaning into this new attitude, Fotheringham said, can actually be to a business’s benefit. Rather than hiring in a traditional way to solve for a business need, for example, a brand could outsource an independent consultant to scope and plan out a project, and then bring in someone more junior to actually carry out that work. “Every time a business hires someone in a permanent position, that’s a fixed cost within the business. Yes, you can make them redundant, but that’s just another added cost,” Fortheringham said. “I think there’s some opportunity to ride the economic uncertainty while still delivering business-critical work.” A different dilemma One area that is harder to outsource, however, is leadership. According to a report by US organisational consultants Korn Ferry, churn in the C-suite is growing across all industry sectors. The last few years have been difficult for retailers all across the world, and it’s unsurprising that CEOs and other C-suite leaders would need to take a step back to recharge. However, the amount of exits is creating a leadership vacuum across the industry. “Boards of challenged retailers are looking for a silver bullet CEO who has instant credibility with the Street,” Catherine Lepard, executive search firm Heidrick and Struggles managing partner of its global retail practice, told Forbes. “Every company is competing for the rarefied CEO with an excellent track record. But that pool is small, and there’s not much incentive for some of these CEOs to leave their high-performing companies to do something messy”.