How can retail combat the rise in staffing costs

Ed Armishaw

How on earth did it get to be so warm already? A question that I asked myself this weekend, whilst taking the opportunity to “enjoy” the seasonal gardening activities like pushing a lawn mower around at my wife’s behest. But instead of me musing and moaning about the endless list of DIY & garden based tasks, I got thinking about many of the conversations I’ve been having with our customers about how the first months of the National Living Wage has impacted them in recent weeks.

As a quick recap, the National Living Wage came into force in the UK on the 1st of April, resulting in anyone over the age of 25 receiving a minimum of £7.20 per hour. I think we’d all agree this is great news for workers, and welcomed by many, but like any increase in business costs it’s also started to eat into profits for those industries most widely affected. Which brings me onto my favourite subject, retail. The retail industry has traditionally employed large numbers of people on minimum wage. It’s win, win really – retailers get relatively cheap hands to help run their shops, whilst workers can take advantage of flexible working schedules and there’s plenty of work to go around.

Retailers reactions to the National Living Wage, can generally be likened to my own tactics when it comes to the garden:

1) “Keeping up with the Jones” – Many retailers (and I won’t name names) have held on to see what the competition do, before making any changes! I call this the “Keeping up with the Jones” approach – in essence, wait til your neighbour finally dusts off the mower & sheers before you are then forced into action.

2) Plan plan plan – I’ve met with a host of retailers (grocers as well as high street) who have been sensibly looking at the books and planning for months. Basically this is my Mum’s approach to gardening…she knows in about November, the exact weeks she needs to get stuff planted in Spring to make the place look a bit tidier!

3) Do nothing – Happily I don’t fall into this camp when it comes to the garden, but ultimately there will be a host of retailers who continue on as if nothing has changed. Many for good reason (good sales performance, lean working model etc etc). 

4) Get ahead of the game – The Ikea approach to retailing…make a point of paying staff above minimum wage, and crack on. I guess this is probably best likened (tenuously) to those annoying people who forgo a lawn & beds for neat decking and a bbq/fire pit. They can then smugly smile at their neighbours sweating with the mower from their garden sofa across the fence.

Now all of the above are valid approaches, and of course there are many more to boot, but we at Walkbase have made it our mission to help the high street fight back, whether that’s from the surge of online shopping, the closing of store space, or the rising costs which may come with the NLW increase. 

In our latest joint webinar with staffing guru’s RotaGeek, we looked at a few approaches retailers can take to combat the impact of this rise in staffing costs now, with a view to being ready for the next increase in 2020. All of our suggestions during the webinar were based on the premise that retail stores are in essence a “black hole” when it comes to data & understanding, and that staffing is often still done in same way today as it was 100 years ago (paper rotas!). So here’s a few ideas.

Optimise when staff are in the store

For as long as stores have existed staff requirements have been based loosely on how busy stores are. Saturdays, for example, tend to have higher staffing requirements because till receipts are higher. But what if you could go further and look at when stores are staffed at a more granular level? 

By using in-store analytics, retailers can see in real-time exactly how busy their store is and alter staffing based on the number of customers, optimising the level or staff to customers and ensuring maximum efficiency. The ability to match staff more accurately with customer footfall means decisions on opening hours and which store to allocate staff to can be made, if contracts allow. All this information can then be quickly shared with employees so rotas can be selected and finalised through an online portal.

Optimise where staff are

Data sources can also be combined to optimise where staff are in relation to customers. By understanding customer movements and dwell times, staff can be allocated to specific areas of the store based on data as opposed to gut feel. Going further, connected technology – such as smartwatches – can be used to notify staff when they are needed in a particular part of the store, either by analysing real-time footfall data or by allowing customers to ‘call’ for staff using pre-installed buttons. This data can be used to predict the busiest times in certain areas of the store such as checkout and allocate staff to tills before the rush hits as opposed to having to scramble people from other areas at the last minute. 

Empower your employees

Given the current rate technology is developing it is unbelieve that the majority of retailers are still scheduling staff using excel spreadsheets or on paper. Not only is far more time consuming to draw up a rota and for employees to schedule, but valuable data is being wasted. Store data – such as footfall analytics and POS data – can be easily fed into the schedule so staff hours are allocated at the time they are most needed and to the right area/department. These shifts can then be allocated based on pre-defined criteria, with the additional hours being shared among other employees remotely – staff just need to log on and select the additional shifts they would like to take on. This not only means staff are more likely to get shifts that suit them, but overtime can be allocated quickly based on personal preferences and shift changes can harness data insights too.

With staff costs increasing and competition within the retail sector being higher than ever, simple alterations such as this can reap huge benefits. Ecommerce has benefited greatly from effective use of rich customer browsing data, high-street stores now have the ability to step into the world of data too.  

So there you have it, proof that time spent in the garden can be put to good use…not only did I get the mowing done (earning some brownie points with Mrs A in the meantime), but it gave me time to reflect on what in my 12 years working with retailers is the single biggest challenge/threat to every retailers bottom line!

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Walkbase provides a retail analytics solution for improving the impact of marketing on physical stores and personalising in-store shopping experience.