Why do businesses recruit new staff?

Growth of the Business

As a business expands, whether locally, nationally or globally, increases in productive output are likely to require additional staff to take on that workload. As the business workforce grows, this also increases the need for more supervision and managerial positions.

For example, Starbucks strategy to capture the middle class market in India has led to a plan to double its Indian workforce from 4,300 to 8,600 by 2028.

Changing Job Roles

The requirements for different roles, responsibilities and skill sets continually evolve as a result of factors such as technological advancements, changing customer demand, organisational restructuring and industry changes. 

For example, in 2021 Unilever recruited 2,000 additional staff to work specifically in their digital and online marketing divisions.

Systems Change

Businesses continually modify their processes, technologies and structures to improve efficiency and productivity. The use of automation and computer aided processing can make some manual skills obsolete while increasing demand for skills such as engineering and data analysis.

For example, IBM is expecting to replace 30% of its 26,00- customer facing positions with AI in the next few years. This will lead to a need to recruit staff with skills in implementing AI and data analytics.

Internal Promotions

Internal promotions are when members of staff are given a job in a higher position in the organisation, such as a supervisor or manager, leading to a vacant position left behind. 

For example, Starbucks has a strong culture of promoting staff for supervisor and managerial positions from within as a method of motivation. This leads to vacant barista positions.

Opening a New Office or Branch

As part of an expansion strategy, businesses may open up new offices or branches to increase their market presence and gain access to markets and staff in different geographical areas.

For example, in 2021 Chipotle Mexican Grill announced plans to open up branches across the USA as an expansion strategy. To staff these outlets they needed to recruit kitchen staff, front of house staff and managers.

Product Development

Product development is the research, design and development of new or improved products to meet the ever changing needs of consumers. In order to remain competitive it is essential for firms to continually review the desirability of their product range. Changes to products may lead to a need for different skill sets in the workforce.

For example, in 2019 Coca Cola launched a new line of beverages called “Coca Cola Energy”. This required them to recruit food scientists, marketing staff with knowledge of this new target market and staff to manage new supply chains.

Staff Turnover

Staff turnover is the rate at which staff leave an organisation. Reasons people leave include retirement, lack of promotional opportunities, issues with remuneration, issues with leadership, work-life balance or a skills mismatch. When a member of staff leaves a firm, it is likely they will need to be replaced through recruitment.

For example, the staff turnover rate in the UK has risen to over 50%. This means that on average, more than half of retail staff do not stay in their jobs for more than one year.

Seasonal Fluctuations

Many businesses sell products and services that have changing levels of demand depending on the time of day, week, month or year. This requires careful planning to ensure staffing levels are appropriate to meet demand at different times without overstaffing.

For example, Macy’s is a popular department store in New York which generally sees a 20% increase in sales during December due to its popularity for Christmas shopping. 

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