Recruiters warn retail HR roles are at risk from cost-cutting
Warnings come after Sainsbury’s axes 2,000 jobs during HR restructuring
Recruiters have warned that HR roles at major retail businesses could be cut as supermarkets reassess their business plans and increasingly turn to automation.
The stark words come after Sainsbury’s announced earlier this week that it would be cutting 2,000 store and back-office roles, as it restructures its HR department.
The move will scrap 1,400 store-based positions along with another 600 jobs in back offices, and will include roles at Sainsbury’s Bank and Argos. The decision, which is part of a three-year plan to cut costs by reducing headcount, means HR tasks such as processing payroll will no longer be done in stores.
The wider retail sector is under increasing pressure to streamline, especially as the ‘big four’ supermarkets — Tesco, Asda, Sainsbury’s and Morrisons — face fierce competition from discounters such as Aldi and Lidl.
In June, Tesco announced it was culling 1,200 head office staff, affecting roles in its marketing, financing, buying and property departments. And last month, Asda cut 288 jobs at its head office and changed the job description for a further 800 roles.
“It’s difficult to keep up with the amount of job cuts being made within retail organisations,” Lee Biggins, founder and managing director of CV-Library, told People Management, warning that other big names might be tempted to follow in Sainsbury’s HR-slimming footsteps if they haven’t done so already.
Biggins added that “automation is rife within the retail sector as many organisations seek to reduce operating costs”, and this could also drive cuts to HR departments in the future. “HR technology is rapidly evolving and many companies are investing in tools that will save time and money in the long run,” he said. “However, these teams are still reliant on human intervention, especially when it comes to employee retention, so it’s important that HR professionals keep abreast with the latest technology and skillsets within the industry.”
Doug Rode, senior managing director at Michael Page, added: “Retail is a very competitive sector, so organisations are constantly reviewing their processes and, in some cases, this can result in job cuts. It simply comes down to businesses optimising their process efficiency, based on reviewing the way they run different parts of their organisation to identify what can be run centrally, rather than locally.”
In a statement announcing the job cuts, a Sainsbury’s spokesperson said: “Following a comprehensive review, we are proposing some updates to our HR structures and systems, as well as changes to a number of other support roles. This has been a difficult decision and we appreciate that this will be a tough time for those colleagues affected. It’s crucial that we transform the way we operate to meet future challenges and continue to provide customers with best in class service.”