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How to Keep Retail Labor Costs Under Control

Out of the many American industries, retail has a massive amount of manual labor. Because there are so many small logistics to coordinate, labor costs can quickly skyrocket out of control.

So, how do you keep those in check while still keeping your employees happy?

Because, after all, if you try to squeeze too much out of your employees without doing something for them in return, you frustrate them. Then they leave faster, which drives up your hiring costs, and spreads the word that you’re not the employer to work for.

Here’s some ideas on how to balance employee happiness with labor costs so you get the best of both worlds:

1. Fine-Tune Employee Schedules

Just like any process in retail, this is easier said than done. How do you keep the optimal number of employees on the job at all times, and especially so during a hectic holiday season when demand can surge at any moment?

Scheduling software can automatically read your point-of-sale data to help you make the right decision for your company.

This software can also monitor your employees’ hours so they can’t steal time. They only get paid for the time they actually put in.

2. Help Your Employees Focus on Customer Retention (Versus Acquisition)

Frequent one-time sales focus on customer acquisition. But as soon as the sale’s done, the customer hops on to another retailer who has their own sale. Frustrating!

Instead, build your sales processes around customer loyalty. Dozens of programs and strategies exist. Offer free home delivery when customers reach certain spend levels, for example.

Keep in mind your employees play a big role in this too. Make sure they understand exactly what techniques to use to strengthen customer relationships. Make returns easy. Make store policy clear and straightforward. Give your employees freedom to make in-the-moment decisions that make customers happy.

That retains customers and makes employees’ jobs fun and engaging, which keeps them happy and at your company.

3. Cross-Train As Much As Possible

Employees stay happy and engaged when they learn new things and successfully take on new challenges.

Doing the same task 100 times per day for years on end leads to boredom and disengagement.

Start by cross-training employees who display the highest aptitude in their current roles.

4. Reduce Turnover

The leading reason employees leave a job isn’t money. It’s because of their happiness. Money is a part of that, among many other factors.

What are those factors?

Open a conversation with your employees to find out. With their help, customize their jobs so they stay as happy as possible. Do it right and you’ll find workers competing to be at your store, rather than running out the door.

Using these strategies and customizing them to your own store leads to much lower labor costs, and far happier employees. So, don’t waste time implementing them because they’ll only improve your business.