Retailers are increasingly considering redundancy and restructuring options, as economic headwinds and trading costs hit the bottom line.
Ragtrader can reveal the workplace relations team at the National Retail Association has fielded more than double the number of retailer enquiries pertaining to redundancy and restructure from 1 January 2024 to May 2024, compared with the same period last year.
The figures are in line with broader movements across the industry, with retailers such as Myer and Aje announcing redundancies across their businesses this year.
National Retail Association interim CEO Lindsay Carroll said a number of macroeconomic factors are forcing retailers to consolidate costs.
"Retailers are facing significant headwinds, and many are looking to rationalise store portfolios, which has an impact on both store-based teams and support staff in head offices.
"According to our sentiment report 78 per cent of retailers highlighted wage costs as one of the top three constraints to their business’ success in 2024. Many are also being impacted high insurance premiums and energy costs.
"Amid the skyrocketing cost-of-doing business, retail spending and growth has heavily regressed due to high inflation and high interest rates."
There is a prescribed legal process for ending someone's employment due to redundancy.
Employers are encouraged to seek advice on how to ensure roles are properly selected for redundancy, and how to consult and communicate redundancy to avoid unnecessary disputes or worse, dismissal-related claims because of business restructuring.
"Following a best practice approach to reducing headcount also helps manage a brand’s reputation in the industry as a good place to work," Carroll said. "At the very least, employees who are impacted by redundancy should be offered access to an employee assistance program and outplacement support. Employers should also be mindful that some industrial instruments prescribe paid time off for employees to job search, in the event of redundancy.
"Retailers should also leverage the networks they have with other brands to assist employees impacted by redundancy to find new roles. In some parts of retail, certain roles are still very hard to recruit for, and some retailers may be glad to snap up employees who have been made redundant elsewhere."