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Bottom Line Shrinking? Five Ways Retailers Can Optimize Labor to Minimize Costs

The return of in-person shopping has happened at varying rates depending on local lockdown restrictions, but the universal truth for most retail stores has been the massive shift to ecommerce —an estimated jump of $183 billion — cutting into brick and mortar profits.

As a result, managers have had to minimize costs wherever possible. Rather than limiting inventory or reducing the customer experience, here are five ways the right retail scheduling solution empowers managers to cut costs through efficient workforce management — without burning out the staff.

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Reduce Unnecessary OT

Uncontrolled overtime is a huge labor expense.

The average retail store reports around 31 hours of overtime each week. Managers need to understand which employees have scheduled overtime as well as the extra associated costs for each day and week.

Overtime reports give managers the insights needed to adjust schedules throughout the week or month and monitor the impact on labor costs, labor percent, and volume. Managers need to review actual employee hours plus how much is scheduled, then the date and time that the overtime could potentially start.

Only after reviewing this data can managers make informed decisions regarding employee overtime.

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Prevent Early Clock-Ins

Every time one of your team members clocks in too early, it’s like skimming a tiny sliver of profit off your bottom line. Early clock-ins affect roughly 75 percent of all U.S. businesses, so managers need to recognize when employees punch in prematurely.

The solution? Enforced clock-ins through an integration with your Point-of-Sale (POS) system and labor management tools. You configure the POS system to only let employees clock-in five minutes before their shift, and an online scheduling system goes to work making sure your employees punch in at the appropriate time using preprogrammed rules.

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Prevent Over/Under Staffing

Overstaffing is pretty easy to spot. Team members are standing around or getting in each other’s way. Managers tend to overstaff to account for those “just-in-case” peaks in volume. There’s a general thinking that overstaffing and cutting people is better than understaffing and having employees on-call. The two biggest problems with overstaffing are the costs that come with paying people to stand around and the resulting lower productivity.

Understaffing appears to keep everyone busy. But at some point, you have to wonder at what cost? Understaffing can lead to employee burnout. It can also lead to poor customer service and shortcuts that lead to inefficient operations. In essence, you’re saving money on labor but increasing waste in other departments.

Building a schedule based on forecasted sales or guest volume data that also considers variables like weather, events, and marketing initiatives is the best way to optimize labor spend.

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Make Back Office Tasks More Efficient for Managers

Scheduling templates are proven to reduce the time it takes managers to make

a schedule. Managers can set up templates based on sales targets or based on seasonality. That kind of optimization can prevent understaffing or overstaffing issues and increase guest satisfaction.

Are your managers monitoring how your actual labor and sales stack up to your predicted labor and sales? Knowing how your labor is performing against your target budget numbers and comparing it to your scheduling templates or any new schedule helps give you crucial insight into your business’ performance.

Writing a schedule can handcuff managers to the back office desk for hours. On top of it all, there are endless phone calls, texts and sticky notes to keep up with and communicate schedule changes.

Online scheduling solutions can significantly reduce the time it takes to create schedules because managers can copy schedules from week to week while making tiny tweaks instead of always starting from scratch. Employees are instantly updated through a mobile app any time a change is made and can request edits to the schedule pending a manager’s approval. All that automation and ease-of-access saves your managers’ time (and your payroll costs!) while reducing expensive scheduling errors.

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Prevent Compliance Failures

States and cities across the United States and Canada have increasingly upped fair workweek laws, significantly narrowing the wiggle room managers have when it comes to creating schedules. To avoid fines detrimental to your business, invest in a retail scheduling solution that updates scheduling and labor requirements as laws are passed.

See how Fourth does all this and more through HotSchedules’ workforce management solution.

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