Maintaining Team Spirit While Trimming the Fat

Many retailers make a commitment each year to trim costs and cut the fat out of their business.  Having an efficient enterprise is important because it frees-up capital that you can put to work in on growing the business, but it is important to think about what happens when your cuts begin to impact the team members that work for you.


cutting costs for retailers



As a retail consultant, I have seen many independent retailers actually suffer a loss of productivity (and even an additional loss of headcount) when they cut too aggressively.  With that in mind, here are some strategies that you can put in place to help you save money and keep your business moving forward.


1. Communicate completely – Let your team members know as much as possible about why you are changing your payroll budget.  This includes what you are doing, why you are doing it, how long the cuts will last and that you are open to their ideas.  The fact is that your retail employees will respond better to when they’re given as much information as possible.  Just make sure that you choose your words wisely…Remember, your goal is to make cuts and then reinvest the capital!

2. Be as Candid as Possible – If you begin cutting hours – or even worse – cutting heads, it will be easy for your employees to assume the worst.  They may think that they are all in danger or that you are making the cuts simply to line your pockets.  Instead, do the right thing and provide as much information as possible.  When you do so your employees will understand and be more likely to buy-in to your plan.

3. Ask for Team Member Input – Often, retail business owners either are so far in the weeds or looking at the business at such a high level that they can miss simple ways to reduce costs or increase efficiency.  One of the benefits of being candid and communicating completely is that many of your loyal team members will contribute their ideas for improving the business and – like the saying says – two heads are always better than one!

4. Consider Different Ways to Save on Payroll – You have probably seen the stories about factory workers who band together and take a small reduction in hours in order to save a fellow employee or employees from being laid-off.  On the retail-side, the advantage of this approach is that you are able to maintain headcount and scheduling flexibility.  Additionally, you might consider implementing a bonus program that is focused on attaining higher productivity targets.  This allows team members to make-up for the lost base compensation while improving your top-line!

 5. Don’t Forget the Importance of Recognition – Whether it is putting your arm around a team member when they are having a bad day, providing praise or verbal recognition when an employee does a good job or planning a weekly pizza party.  There are small things that you can do to recognize your team members’ sacrifice and productivity improvements!


Are you interested in learning about ways to improve your retail productivity?  Our retail training programs can help you save money by selling more!  Contact us for a free one-hour consultation!


–          David Goodwin is the Principal of the Retail Advocacy Group.  As a 30 year veteran of the retail industry he has hired, trained, and performance managed thousands of retail sales representatives and retail managers.  You can learn more about instructor-led, e-learning, and other training solutions for retailers at