If Black Friday sales fail to deliver for retailers and suppliers, several brands, particularly distributors operating on tight margins, are set to lay off staff, according to several organisations that ChannelNews has spoken to.
Several CE and appliance distributors have already moved to cull staff, with some holding back until the results of Black Friday sales are known.
A report from the Australian HR Institute claims that close to one-third of Australian companies intend to make redundancies before Christmas, with 60% in the mass market planning to sack people due in part to mandated wage hikes, according to several organisations we have spoken to.
“We cannot keep raising salaries without increased profits, and we will not get profits unless the market changes and sales start to improve,” said the CEO of a major supplier to CE retailers.
A report from the Australian HR Institute also found that workers in manufacturing and production will be strongly affected, with 37% per cent of employers indicating they will have to lay off staff.
Back in September, management was predicting a 17 per cent cull in staff levels.
Workers already facing financial pressure are already starting to panic, with the AHRI claiming that 40 per cent of employers reported an increase in staff taking sick or carer’s leave last financial year, with only 19 per cent seeing a decrease in such unscheduled absences.
The survey of 600 senior HR professionals, found, conversely, that recruitment activities have increased from 61 per cent to 71%, suggesting that many workers are jumping ship voluntarily and some companies are restructuring via redundancies rather than reducing overall staffing levels.
As for recruitment, the share of employers who have experienced recruitment difficulties in the past three months is 47%, around the same level as the previous quarter.
Similarly, the average employee turnover rate in the 12 months to the end of October 2023 is 14%, which is unchanged compared with the previous quarter. The rate is highest among (private sector) manufacturing and production firms (18 per cent) and lowest among public sector (12 per cent) and not-for-profit organisations (12 per cent).
The days off work were largely driven by Covid-19, home responsibilities, and minor illnesses, with workers taking an average of six days off in FY2023.
Cost-of-living pressures 51%, work-life balance concerns 40%, and excessive workloads 38% are the most significant stress factors for workers, the report claims.
The report found the mean basic pay increase in organisations (excluding bonuses) is expected to be 2.6% in the 12 months to October 2024.
