Pandemic over-hiring ends as inflation causes business slowdown

Major retailers are scaling back hiring as inflation sees many consumers spending less.

The new hiring strategy comes after companies struggled to fill positions for more than a year in what came to be known as the “Great Resignation.”

Typically, retailers look for workers with previous experience, but due to the sudden surge in customers as pandemic restrictions wound down, businesses began doing the opposite.

However, recent data suggests that businesses are becoming selective in the hiring process again.

Snagajob, a website that helps people find hourly work, reports that although postings for hourly retail work are still high, they have been slowing down over the past few months.

Large companies such as Amazon, FedEx and Walmart all began hiring in droves to rebound from COVID-related shortages in labor, and all three have begun to slow down their hiring recently.

Amazon especially began its hiring spree early in the pandemic as online shopping boomed. But with pandemic restrictions lifted, demand for contact-free shopping has decreased.

In addition to a hiring slowdown, Amazon, which nearly doubled its workforce over the pandemic, is making moves to decrease its economic footprint. It has let leases on some warehouses expire, stopped construction on others and even plans to sublease some of the extra space in their warehouses.

The same can be said for indoor restaurants or clothing stores. Both industries rushed to hire once pandemic restrictions were lifted last year, but now find the cost of labor to be too much when customers aren’t coming.

Due to surging gas prices and inflation, the purchasing power of the average consumer has diminished significantly. This has led to many consumers passing on luxury or non-essential items.

The hiring slowdown also comes when unemployment is relatively low, sitting at 3.6%. Early analysis of the June 2022 labor report suggests that the U.S. will have added nearly 270,000 jobs last month, which would make it the smallest monthly total in a year.

Despite the damages that big businesses have taken in the past few years, small businesses have faced the brunt of labor issues.

Unable to pay for large bonuses or increased pay, some still struggle to fill many of their jobs or even get potential employees to show up to interviews.

“They’re still clawing their way back, whereas some of these over-large companies are now discovering they have a hangover,” Mark Cohen, director of retail studies at Columbia University, told the Associated Press.