The labour supply challenge
Attracting and retaining talent remains a top priority for consumer businesses. With a global labour supply shortage, workforce planning is a key focus. The so-called "Great Resignation", coupled with a fluctuating demand for labour, has resulted in many consumer businesses struggling to ensure that the right people, with the right skillset, are in the right place. Although the turbulent economy will focus minds on reducing costs, this does not mean consumer businesses can afford to lose essential personnel who are key to delivering strategic goals. Retaining a flexible and fluid workforce, able to adapt to the peaks and troughs of the current climate is crucial.
Attracting and retaining talent: What practical solutions are there?
With such a competitive labour market, many employees are in the advantageous position of being able to seek out the most attractive salaries and benefits packages in order to combat the financial repercussions of the cost of living crisis. With margins tight, it is not generally an option to increase pay packages, so employers must think creatively. For example, we have seen some employers allow increased flexibility to help reduce childcare costs and some are allowing employees to sell back some of their unused annual leave (providing the statutory minimum annual leave is not impacted). Shortening shift hours to allow more flexibility and attract a wider field of talent is also being rolled out in some businesses. These options may be particularly useful for consumer businesses wanting to increase labour supply at busier times of the year, such as religious holiday periods or over the summer months. Some employers are also offering a financial well-being policy and/ or counselling to help support those encountering difficulties.
As always it will be important for consumer businesses to consider the legal implications when offering support. Do terms and conditions need to be updated to reflect a new working arrangement? Have policies and procedures been reviewed? Has the support been offered in a non-discriminatory way?
In addition, there is significant evidence that an employer's approach to ESG, in particular commitments to diversity, inclusion and climate action, play an important role in attracting and retaining talent. Businesses demonstrating support to their communities and working with charities are also seen by employees as ones to join or stay with. Being proud to work for an organisation with a positive purpose is increasingly a key decision factor for colleagues. Adding to that the benefits of creating a supportive environment will inevitably help form a foundation of trust inspiring loyalty within the workforce.
A focus on numbers: Will the cost of living crisis lead to job cuts?
As with any economic crisis, employers are looking at ways to reduce expenditure and wages are ordinarily the largest financial commitment for a company. Although retaining top talent will be a key theme, employers in the consumer sector are also likely to be considering cutting costs in certain sections of their businesses which are not as productive, or are under pressure from the trade headwinds which may result in some redundancies. Business continuity is a priority and where sales have been slower than anticipated, we expect many more employers will have to make difficult decisions.
The manner in which difficult decisions are taken, and the processes which follow, will be under greater scrutiny than ever. There is an increased risk to the whole workforce when sections are subject to change. It is therefore important that when operating a redundancy procedure, a fair and transparent process is followed in accordance with local legislation. The key to a successful redundancy programme is to:
- plan carefully, especially for unexpected contingencies that might arise;
- communicate clearly and effectively; and
- take legal advice when the proposals are at the formative stage to ensure that all the legal, practical and logistical challenges are addressed.
It is also important to ensure that colleagues subject to change are treated with dignity and respect.
Balancing a redundancy process with trying to retain a core stable workforce is not an easy task. Making redundancies can have a significant knock-on effect on the wider workforce with employees concerned for their own job security. Consumer sector businesses will need to communicate and engage with the workforce to offer reassurances where possible. Sharing a clear strategy on the business's goals may help alleviate any fear surrounding job security following a redundancy process.
An inclusive environment: The importance of workplace culture
Fostering a positive workplace culture is key to attracting and retaining talent. A culmination of factors impacting the retail, food and hospitality sector have resulted in a testing period, from increased bullying and harassment claims during the pandemic to managing staff shortages due to sickness absence. Furthermore, businesses have had to adapt to a significant amount of change from the increased demand for online channels and click and collect provisions to other new technologies. During periods of challenge and change it is more important than ever for leaders to help pull the workforce together and drive a positive culture, reminding employees of the expected standard, calling out inappropriate behaviour and allowing a safe space for colleagues to speak up. Consumer businesses which are able to create a sense of community and loyalty during this period of economic uncertainty will find that they have fewer issues with attracting and retaining talent.
If you have any questions or would like to discuss any of these topics and what they mean for you and your business, please get in touch with our consumer sector and Employment experts.
