September 21, 2017
Improving your retail payroll productivity
With the breakneck speed of change in the retail industry, you can’t afford to not give shoppers what they want. And what they want is your employees’ time.
Just last week, 66 percent of millennials in a survey by ChargeItSpot said knowledgeable associates were extremely important to the shopping experience. And it’s not just younger shoppers who want informed help when they shop in your stores — 78 percent of consumers surveyed by PwC said sales associates with deep product knowledge were important to them.
If you want to build loyalty with shoppers and keep them coming back to your stores in the years ahead, you must make sure employees are available to help locate items and close sales. That’s called payroll productivity – making the most of your employees’ time on the clock.
In this uber-competitive environment, most retailers have done efficiency to death, but productivity seems harder to tackle. What’s the difference? Harvard Business Review’s Michael Mankins breaks it down for us: Efficiency is “about doing the same with less,” while productivity is “about doing more with the same.”
Your employees are one of your most valuable assets – you’ve spent time and money training them, and they’re on the front line with your customers every day. You don’t want to do the same with less by maintaining the status quo in your stores with fewer employees. You want to do more and maximize the value of your investment in employees by helping them focus on activities that boost your bottom line.
That means you have to train associates to recognize when they should stop a task like stocking displays for a few minutes and help a shopper find what they’re looking for instead. It’s not necessarily efficient, but it is productive because you’ve increased the shopper’s basket size. (Just make sure your policies aren’t set up to penalize an employee who prioritizes a customer over a task.)
But tasks like stocking, cleaning, and updating signage can be productive too – just less tangibly so. When employees make the best use of their time on the clock, they have a few minutes to complete price changes, to clear a fitting room or to shine the front door. These things are harder see in sales KPIs, but they all contribute to increased sales. At the same time, you can’t let them get in the way of helping customers. Tangible and intangible payroll productivity is a delicate balance.
So you need to give employees time with customers, and you need them to make sure that you have a well-stocked, properly merchandised, appealing sales floor. To keep payroll productivity high, the question is: What can you ask them to spend less time doing?
For many retailers, back-office activity like currency management consumes a lot of time, rendering payroll hours non-productive. When you streamline tasks like deposit preparation, reconciliation and reporting, your employees have a lot more time to work with customers, generate sales, open up another register or work on other activities that add value.
Take a look at how your payroll hours are used. Ensuring you make time for both the tangible and intangible aspects of customer experience could make the difference you need to stay ahead.