How to manage staff costs
Physical store costs
There are a lot of costs involved with running a physical store such as the rent of the building and the utility bills. But in most cases, the single largest expense is staff wages and these tend to grow on an annual basis, regardless of whether profits are growing by the same margins. Managing staff costs is one of the biggest challenges for employers across the fashion and clothing industry.
Managing costs in a positive way
In the last year, the UK’s national minimum wage has increased by around 4.6% but the retail sales have only risen by 3.7%, meaning that the costs of staffing is costing more than the increase in profits across the same period of time. Many employers have fallen into a negative mindset, looking at staffing costs as a damage limitation exercise but this can be counter-productive.
The key part to understanding staffing costs is to look at the relationship between staff levels and sales conversions. A study by Deloitte, for example, showed that having more staff available leads to better customer service. This in turn leads to more sales and a better sales conversion. But understanding customer traffic is the key step in understanding when you need staff to be available to offer that better customer service and encourage that improved sales conversion.
The online world is a very different place to physical shops in many cases but there is something from the internet shopping arena that can transfer to the world of high street shops with a huge benefit – analytics. Known as customer analytics and sometimes as people counting, this is a combination of using technology that allows retailers to better understand their visiting physical shops.
Already, there are ways to gain insight into what the customer does within a shop that wasn’t available a few years ago. The use of CCTV cameras to monitor security in a shop has led to the ability to see who customers are – basics such as gender and age group. Store managers can see where in the shop people go and don’t go using a combination of surveillance and Wi-Fi hotspot technology.
Wi-Fi hotspots allow shops to track the movements of a person in the shop as long as their phone is connecting to Wi-Fi nodes. This doesn’t intrude on the person or collect any of their data but simply registers their presence by the Wi-Fi hotspot they are closest to at any time.
Integrating numbers with rotas
Planning when to rota in staff isn’t something easily done manually and therefore good software is the key to achieving this. When looking for this kind of software, businesses should seek something that takes the customer patterns and store usage information provided by customer analytics and creates patterns to help choose when staff are needed and where.
Integrated staff planning technology can then use this information to see what staff numbers are required at what time or day. This means there are more staff on hand to offer that top customer service at key times. It also reduces the chance that there are surplus staff with nothing to do because they have been scheduled to work at quieter times alongside too many colleagues.
StoreTech’s co-ordinated staff planner
While not every aspect of a retail business can be automated or can use technology to improve it, managing staff costs and using resources wisely is one area that can and Storetech’s Co-ordinated Staff Planner is an easy way to do this.
The idea of the system is that a business can schedule staff resources around traffic so that when the most people are visiting the shop, there is the most staffing resources available. At one time, this was done manually with pen and paper and left room for personal interpretation and mistakes. But by using the Staff Planner, you can align staff to historic traffic patterns and create rota templates that make it easy to duplicate patterns when you know the week or month will follow a similar pattern of the one before.
The planner is also a great way for businesses to ensure labour budgets are met and that staff are used at the optimum times. This data can also be exported to payroll systems to pay staff for the hours worked as well as have staff data imported to the system to personalise the information held. Data such as staff absence can also be managed as a record for each individual employee can be created, monitoring their working and absence patterns.
By using StoreTech’s Staff Planner alongside customer analytics information, it is also possible to increase staff productivity with its corresponding increase in customer satisfaction. The system allows businesses to offer a better experience moving through the store with less waiting time at checkouts or more staff on hand to answer queries – when the statistics show they will be needed.
On the turn side, if there are less staff in the premises at quieter times, this avoids boredom and lethargy in staff. It also avoids that uncomfortable experience where lots of staff seem to be standing around doing nothing – never a good visual for a customer entering the store.
Be right more of the time
Even the best of store managers find that they are only 80-90% correct in terms of manually created labour schedules – there are still times when there are too many staff in the premises without customers to serve or too many customer without the right number of staff. Using quality software takes the randomness out of these decisions and allows the manager to make informed choices based on hard data as well as their own experience.
By improving staff scheduling and managing staff costs, the business can maximise profitability and ensure they are offering a top-quality customer service. One example said it takes 12 good customer service experiences to make up for one poor one – but if there is no poor experience in the first place, then there is nothing to make up afterwards.