Payroll Optimization Pt. II: Staffing Evaluations and Strategies

by ShopperTrak on 02-08-17

As a follow-up to my earlier post, which explores how retailers need to balance staff levels with cost-cutting measures, I want to examine how staffing evaluations can thoughtfully inform staffing strategy. First, be sure to review the graph in my previous post and establish where your service model falls on the continuum, as a store’s service model is the basis for staffing. It also speaks to a customer’s expectation of service.

Service Models

If a retailer is selling a high-touch product that requires significant consideration (due to cost and usage implications), their stores’ STAR (Shopper-to-Associate Ratio) should be low. This is because shoppers require the expertise of an associate to guide them throughout their path-to-purchase.

On the other hand, many retailers can have a high STAR and attain success, as their service model does not require associates to personally interact with shoppers until they are past the decision-making process. This holds true for grocery, and can be applied to other high-transaction count stores including discount retailers.

Associate Mix

The U.S. Bureau of Labor Statistics reported that in 2014, there were 4,859,600 retail jobs in the country with 1 in 3 retail salespersons working part-time.

Each retailer needs to engage in staffing evaluations to determine the appropriate mix of full and part-time associates based on their desired labor model.

  • Hiring part-time workers – may be a more attractive choice for business owners who need to keep costs to a minimum. However, part-time workers may not be as committed to the job or the company when compared to a full-timer. As a result, absenteeism may be higher than with a full-time workforce. Part-time workers may also have less experience and may be limited in the types of tasks they can perform. This can become an issue in retail environments that require associates to be experts.
  • Employing full-time workers – offers an array of benefits including their vast expertise, commitment to the operation and overall drive for success. And yet, many full-time workers lack schedule flexibility and are more costly from a compensation perspective.

Staffing Evaluations

In order to understand if a store is staffed effectively, a store manager should look to specific metrics including:

  • STAR – the ratio of shoppers to associate labor hours
  • Conversion – the percentage of store shoppers who complete a purchase transaction
  • Average transaction size (ATS) – the average amount spent per in-store purchase

STAR identifies the expected service level of your staffing decision while conversion and ATS illustrate the effectiveness of your staffing. At a summary level, weekly and daily STAR compared to conversion and ATS help to identify overall performance gaps. Drilling further into each day helps to flag times of the day during which schedules should be adjusted to optimize coverage or where there may be training opportunities. From there, a retailer can recognize areas for opportunity and optimize their approach based on data.

In the End

Retail operators are frequently pressured to cut costs. And yet, trying to increase the cost of labor is not necessarily a bad thing. Associates are a key piece to a retail environment and they are the catalyst for generating sales and increasing customer engagement. Further, a positive interaction with a sales associate creates lasting customer loyalty – a point of differentiation in an increasingly competitive retail environment.

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