MESSAGE FROM OUR CEO’S DESK

If you’ve checked your feeds over the last 48 hours, you’ve probably seen the collective meltdown happening across the business world: Shein is acquiring Everlane for $100 million.

Everlane – the golden child of "radical transparency" and sustainable wardrobe basics – was just bought out by the ultimate devil of ultra-fast fashion. The internet is absolutely livid, calling it a betrayal of millennial idealism.

But, if we look at the cold, hard numbers, this was just basic math.

Everlane was sitting on roughly $90 million in debt and facing declining sales. When a business finds itself that deep in a hole, the values-driven options disappear. This is where ethical capitalism fails. Everlane had three choices:

1. Do a deal with the devil, which they did, taking Shein’s cash to clear the debt.

2. Find an ethical white knight, an option that either wasn’t on the table, or wasn’t at a high-enough price tag.

3. Shut the doors completely, liquidate, and force everyone to take a catastrophic loss.

Everlane chose survival. The reason this hurts so many consumers is that the brand felt like a noble promise. But underneath compelling marketing, it was just a business – one that was heavily subsidized by investors who eventually, invariably, demanded their payday. So, I’m not pissed about the acquisition. I’m pissed that we were led to believe that Everlane as a business (their ethics, scale, profits, etc.) was EVER viable. 

The HR Parallel: Corporate Idealism vs. Business Realism 

As people leaders, we need to extract the lesson applicable to us. Too often, HR falls into the "Everlane Trap." We believe that we can focus entirely on the fluffy stuff, like engagement surveys, fringe benefits, and initiatives that make employees feel good, without focusing enough on the viability of our business. 

Don't get me wrong - that’s critical work. However, the business has to be stable and profitable first to enable the success of those programs. By prioritizing the liquidity of a Shein acquisition, Everlane signaled that their celebrated sustainability initiatives were secondary to the prerequisite of a profitable, scale-driven exit. They built a virtuous brand on a foundation that couldn't support it, and when the money dried up, the values were the first thing to go.

I saw something like this play out with a client of ours. They parted ways with their Head of HR because this leader was hyper-focused on culture initiatives at a time when the company was undergoing massive, volatile structural shifts. The HR leader’s head was in the clouds, playing the role of the cultural protector, while the rest of the leadership team was making painful, high-stakes calls to keep the business solvent.

When HR isolates itself in a bubble of idealism, detached from the balance sheet, two things happen:

1. You lose your seat at the table. Leadership stops looking to you as a strategic partner and starts viewing you as an expensive luxury.

2. Your programs die anyway. Just like Everlane’s sustainability goals are now at the mercy of Shein, your culture initiatives will be the very first thing chopped the moment the business hits the red.

The Takeaway

True leadership isn't about maintaining a pristine, idealistic bubble while the foundation cracks. It’s about building a people strategy that directly strengthens the business model. If the business fails, there won’t be any employees left to build a great culture for. 

We can mourn the irony of the Everlane acquisition, but let it be a loud wake-up call. Values without a viable business model are just marketing. And HR programs without financial reality are just a luxury. You can't protect your people if you can't keep the lights on. We can still do incredible, values-driven work, but only if leadership remains ruthlessly aligned on the face that a healthy mission requires an even healthier bottom line.

THE HR BRIEFING 🗞️

THE LATEST NEWS TO KNOW

HR headlines and stories, curated with our perspective. 🤝

Colorado expanded its AI laws and now requires employers to provide "post-decision transparency." If a candidate is rejected by AI, the company must explain the decision, allow the candidate to correct any inaccuracies, and, most importantly, allow for human review.

• ↪️ PFunc’s Perspective: A true testament to the fact that AI cannot replace the humans. Humans should always be responsible for decisions and oversight.

The EEOC is proposing to rescind regulations that require companies to report workforce demographics via EEO-1 forms. Critics warn this rollback will make it nearly impossible for the government and advocates to track, measure, and prove systemic workplace discrimination.

• ↪️ PFunc’s Perspective: You can’t fix what you don’t measure. And just because you’re not measuring it doesn’t mean the problems aren’t there. Leaders who actually value progress, and boast a moral and strategic compass, will continue to track these metrics and won’t wait for a mandate to continue doing the right thing.

A couple of other trending stories:

• HR Dive: Hiring cycles have stabilized, with non-technical roles now averaging 8 weeks to fill, while technical roles have leveled out at about 10 weeks.

• Greenhouse: Only 12% of job applicants will complete a process that requires AI, while 38% choose to withdraw immediately.

COMPLIANCE CHECK

Watch out for these HR compliances going into effect (or hitting deadlines) this month.

• Illinois (eff. 6/1): Companies with 16–50 employees must provide 10 days of unpaid leave if an employee’s child is in NICU, while those with 51+ must provide 20, or face penalties up to $5,000 per violation.

• New York (eff. 6/10): Private employers must include opioid antagonists like naloxone in federally mandated first aid kits.

• Colorado (eff. 6/30): Employers using high-risk AI for hiring must implement formal risk management policies and oversight programs (as discussed in The Briefing).

THE OPPORTUNITY EXCHANGE 📈

ROLES ON OUR RADAR

The PFunc job board is packed with open roles across our client companies, making it easier than ever to tap into our network.

This week, we’re highlighting remote job openings.

• Inspiren, VP of Quality - Lead multiple ISO 13485 certifications from scratch.

• RADAR, Field Deployment Operations Associate - Blend technical grit for hardware troubleshooting and project management chops to lead external vendors and stakeholders.

• Honeycomb.io, Senior Technical Customer Success Manager - Talk OpenTelemetry with engineers and ROI with stakeholders in this high-level role.

See a role you’re interested in? Reply to this email and we’ll try to connect you with the hiring team. Hiring for an open role yourself? Reply to have your job featured in an upcoming PFunc Pulse issue.

WHERE TO NEXT?

Our team is always on the move, popping up at the HR events, conferences, and summits we actually love.

JUNE

• PFunc Plays Hooky: Cooking Class with Sequoia (Taste Buds Kitchen, New York City) – June 3 from 2 to 4:30 p.m.

  • Spots are limited! RSVP for a midweek escape with People Function, Sequoia, and a curated group of execs. We’re trading the boardroom for the kitchen to stir risotto, sip vino, and swap stories. 🍷

CHRONICALLY ONLINE📱

Forward this to your coworkers who're notorious for interrupting you. 🫢

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STAY IN TOUCH 💌

If you’re interested in fractional HR support for your team, reply to this email or contact us to learn more about our offerings, pricing, and how we can support your growing company.

Join the Talent Network here (it’s free!). Whether you’re actively exploring new opportunities or happily employed but open to the right fit, becoming part of our network boosts your profile when roles align with your experience, skills, and career goals.💡

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Every Tuesday, The PFunc Pulse delivers the HR news and compliance shifts you actually need to know about, without all the corporate fluff. Emma brings her unfiltered take on the trends keeping CEOs awake at night, served with the gritty, practical wisdom of a founder who’s seen it all. Real talk for better people decisions, week by week. (P.S. Do your work bestie a favor and forward this— friends don't let friends do old school HR. 🫢)