Economic factors are those that may limit the customer from buying optional luxuries. Economic factors include taxation, inflation, interest rates and economic growth. During a recession, consumers spend less on optional items such as cars and appliances.
As a result, the business environment suffers. Alternatively, if the economic environment is one of affluence, consumers are more likely to spend money, not just on necessities, but larger items as well. Last year recession meant that some employee’s wages were cut down, not much employees were made redundant because of this but wages were slashed to pay for other company costs. In case of an unemployment decrease, turnover will rise and recruiting more employees will become harder though the opposite effect if unemployment increases.
Another economic factor is Inflation usually affects someone’s buying power –rising prices means you pay more for the same goods. If there is a rise there is a high probability that there will be a fall in the amount of merchandise bought from River Island. These means business costs increase and sometimes have to stop producing lots of merchandise and focus on spending money on important cost leaving some workers unemployed.
Social trends are one of the key factors affecting a business; this can include the demographics, age distribution and lifestyle. Social trends are important as they focus on the society and at the end of the day, if the public are buying then the demand at River Island will increase, which means more production. The demands for some popular clothes are determined by fashion. Fashion trends are constantly changing every season meaning more customers are willing to buy from a popular up to date clothing store due to its good reputation.
People are now more career focused than previous years, people seem to be more determined to achieve a good status in their dream job to make money and buy all their wants and needs. The most significant sign of this is working mothers- back in the 50’s women were forced to stay at home to cook and clean for their families. Now women have the opportunity to work especially to provide for their families.
Though working mothers mainly work part time to cater to when they need to pick up their children from school, though it is now modern for women not to have children. They are much more career focused. More and more employees are trying to make as much money as possible, though River Island is not a store that pay their employees high wages, not much of a ‘career focusing job’.
River Island, works enthusiastically with its suppliers and official agencies around the world to provide a standard health and safety regulation to its employees. The company always ensures that their suppliers sign a contract which commit to World Wide Ethical standards and those who violate them will be prosecuted.
Technology has both a negative and positive effect on business recruitment. The positives are that technology like online selling and shopping can benefit an employee because it allows them to sell River Island clothing and accessories online to a wider variety of people on websites like EBay or Amazon. It also can provide more jobs in creating websites, maintaining and updating the website which a River Island representative could do.
Though technology can be a disadvantage having a website means fewer employees to recruit as people can easily just buy products online. Employers also can now employ people who have good IT skills; this can help to keep River Island as a business up to date. Online selling/websites can affect the workforce of River Island, this because consumers find it easier and more effective for them to purchase items online.
This affects employees of River Island; they may lose their job because River Island can now reduce cost, and spend it effectively. Employers can also use social networking sites as ways of keeping an eye on their employees, investigating on what they are really like. This is happening more often now, though these social networking sites can act as way of motivating staff by building a relationship with them outside the working environment.