Reduce Labor Costs in Retail, Coffee Shops and Bakeries: 5 Simple Tips

Having your excellent staff is worth every penny…most of the time. But with rising minimum wages, it’s important to not let too much time slip between the cracks. Optimizing your floor staff hours, whether you have a retail store, coffee shop, bakery, or quick-service restaurant is an important budget goal. Plus, your employees will appreciate it – no one likes idly standing around waiting to be cut.

With an employee management system integrated into your POS system, your labor costs are easy to calculate. All data is taken directly from your POS and automatically calculated into understandable numbers. But how can you reduce your retail labor costs? Here are 5 things to keep in mind.

1. Pay Attention to Your Scheduling

Keeping a long-term set schedule is convenient and easy to manage, but it’s not always great for keeping labor costs at the right level. Most businesses have ebbs and flows in their sales throughout the month or season. Track historical sales data with your POS system to better anticipate in-store traffic. Keeping your schedule flexible might add a few more responsibilities to your management, but it will allow for better labor costs.

It will also keep your staff more content. Most retail employees enjoy having a flexible schedule and will prize an extra day off or an additional shift here and there. You can also use this as an opportunity to play to individual strengths as well. For example, some staff might have a strong preference to work the busiest shifts, while others may thrive in quieter environments where they get to more one-on-one time with customers.

Finally, avoid overtime at all costs. Overtime pay will quickly erase saved labor costs in other areas.

2. Organize All Tasks in the Store

Keeping a detailed list of responsibilities throughout the store is a great way to get a better idea of how long certain things take, who does them well, and how they can each be best completed. You’ll know when you need more staff and when you can afford to run with a lighter group. This will also give you instant feedback on both employee preference and performance for certain tasks.  Here are a few things to keep in mind when organizing your store tasks:

  • Make tasks simple and achievable
  • Identify the priority level
  • Assign them clearly by person/role
  • Keep progress visible
  • Highlight completion

There are task management apps available for retailers that can make this more organized and rewarding.

It’s also helpful to cross-train your staff. Most people enjoy learning new skills and becoming a more valued member of the team. If your staff is capable of performing various tasks you will require fewer people on the floor (especially during slow times) and always have backup if an employee calls out or quits.

3. Lower Employee Turnover Rates

Hiring new staff is expensive. First, you have to recruit new staff. Depending on what avenue you use, this may be a substantial cost. This can also include interview costs, job fair fees, drug screenings, background checks, and for more senior positions, even signing bonuses and relocation expenses.

You also have to pay them to train, which is adding another body to the service or retail floor and your labor costs. This can lead to other indirect costs, such as the lost revenue from being understaffed during the interim period.

Plus, high turnover rates look bad. They’re never a sign of a healthy business. Keep your staff happy by providing a great workplace environment and a path to career advancement.

4. Pay Attention to Historical Sales Trends

As we mentioned earlier, it might be easier to keep a set schedule throughout the year, but it will never be optimal. Most retailers, for instance, are much more busy during the holiday season. Many big-box retailers even bring on temporary staff for this season. For many of these businesses, this is drastically different during July and August.

Use your point of sale system to generate detailed sales reports from past months and years so you can better anticipate how busy your business will be. Of course, analyzing sales and overall performance is, by itself, an important maintenance operation for any small business.

Depending on your business, it might also be worthwhile to adjust your scheduling based on the weather. A quick service restaurant in an amusement park doesn’t typically need a full staff on a rainy day. This may seem a bit obvious, but staying alert and taking action early will keep staff happy and the few hours of extra pay saved each time will add up to a lot a the end of the year.

5. Keep Scheduling Organized and Automated

Just like so many other retail operations (inventory, loyalty programs, ordering, etc.), your schedule can be automated. Gone are the days of printing the schedule on a tiny Excel spreadsheet and magneting it to the walk-in fridge.

Invest in one of many affordable scheduling apps. Among many other tools. these allow staff to switch shifts and request time off, or for you to send notifications and schedule team meetings. They keep things simple and minimize confusion and mistakes.

Reduce Your Labor Costs with KORONA

As we mentioned in the blog, your labor costs can be managed through your retail POS or coffee shop/bakery point of sale. And our great support team is here to show you exactly how. Just click the link below and get signed up with a free trial so you can see all that KORONA has to offer.

Your KORONA POS Demo

About the Author:

As Content Strategist at KORONA, Michael comes from a background in blog writing and content management as well as extensive use of various point of sale systems. He's passionate about helping small businesses reach their potential, and Jeopardy. For inquiries and suggestions please contact our marketing team.