How Not To Worry About Payroll And Retail Productivity

PaydayAsk any retailer what their biggest concerns are and controlling payroll cost while boosting productivity is likely to be one of their key concerns. New minimum wage increases in many U.S. locations will make this even more of an issue in 2015.


That is why as retail training consultants we are often surprised to find that many retailers do not discover that they have a labor productivity or cost issue until after they have cut their payroll checks. Managing labor and productivity is done best when it is a daily undertaking.  Here are some best practices that we have gathered over the years.


Eight Best Practices For Managing Retail Productivity:


1 – Prepare a monthly labor budget and then update your status on a weekly basis. The budget can be a top-down number based on percentage to revenue or – our recommendation – is to do a bottom-up projection based on previous productivity and historical sales trends.

2 – The weekly or bi-weekly labor schedule is based on a spreadsheet that projects daily sales, customer foot traffic or a combination of the two. Our retail start-up kit includes several templates that can help with this. The key is to plan your payroll so that you are never surprised at payroll time.

3 – Store and shift managers should always have a copy of the schedule with them. They should also have a listing that includes employee availability, productivity and number of hours. This allows them to make adjustments for increasing or decreasing floor coverage as the day progresses. Remember, payroll control is not just about containing cost…it is also about not losing sales due to under coverage.

4 – Clock-in and clock-out errors are corrected as they occur. Employees hand should hand their time card to a manager (or time card) for approval in real-time. This allows inaccuracies to be corrected before they leave. Many POS systems with time keeping functions allow editing. This practice also prevents employees from clocking one another out.



5 – Have a contingency plan for slower and faster than expected sales. Many employees are willing to leave early when not busy and many others are willing to come in when needed. Our Top Check Retail Manager’s Planner is a perfect tool for helping with this task.

6 – Speaking of planning…Plan to have your most productive employees working when they will be most effective. Top sales reps should be working when the store is busiest while your best operators may be best suited for days when orders arrive. Everybody has their strengths…so schedule to them.

7 – Make your team members even more productive. Too often we accept that team members are just going to do what they are going to do. But the truth is that most employees want to learn new things and practice new skills. That is where low cost on-line retail courses can help! So train your team members to be even better than they are.

8 – Hire based on the store’s and the Company’s requirements. Other than inventory, payroll is usually a retailer’s largest expense. And making an error in hiring can cost tens of thousands of dollars in lost revenue, overtime, and lost productivity. So take your time when hiring and hire the right person, not the first person that comes along.

By incorporating these practices into your day to day routine you’ll avoid surprises on pay day, improve your labor productivity and have a lower overall labor cost.