With the economy always in flux and shopping behavior fickle, small retail businesses must keep their eye on making sales, but also keeping costs down. This doesn’t mean, however, that you have to cut cashiers or try to be manager, inventory specialist and salesman all in one. Despite being in an industry with a fast turnover rate, most retailers hope to find an employee who is dedicated to the store, its merchandise, and most importantly its customers. These employees are an invaluable asset to your business and its bottom line, making them the last cost you want to cut.
The truth is cost cutting, especially when it impacts the payroll, can often have negative side effects on employee morale. As American Express’ OPEN Forum blogger, Darren Dahl, writes, “While you might succeed in adding a few dollars to the bottom line, you might actually suffer a net loss in the productivity of your employees.” Below are a couple methods to help both your business and its staff with the ultimate goal, making money and keeping morale high:
1) Ask for ideas. Don’t overlook your most valuable assets, your employees. They not only have first hand knowledge of the processes to help point out areas of waste, but can also provide you with innovative insight about your customers as they interact with them, learning about their needs and what might be missing in fulfilling those needs. As Marla Gottschalk, Ph.D., a practice manager with organizational development firm Rand Gottschalk & Associates, admits, “It can take some planning to create a channel of communication where employee ideas on cutting costs can be brought up, but when it’s done well, great rewards follow.”
2) Lay people on, not off. Laying off employees will only have the rest of your staff fearful of losing their job, or they may leave before being asked, leaving you understaffed and even less capable of making sales. Instead, ask employees if they would volunteer some extra time to help the store out, especially if you are considering increasing store hours to compete with late night and all weekend, big box retailers. While you may not be able to offer them their typical hourly rate, or anything at all, once the extra work shows some turnaround in the bottom line, perhaps there could be a bonus down the road. Once again, it is all about communication.
One thing is for certain; hardworking loyal employees cannot be taken for granted, even if your cash register is a little drier than in previous years. As the store owner and their employer, you should make the effort to recognize the efforts of those employees who continue to keep the storefront going. As Roy Saunderson, president of the Recognition Management Institute, says, “What employees won’t forget is how managers treated them during the tough times. That means you should be increasing the amount of time spent one on one with employees, writing appreciation notes, listening to concerns and thanking them,” and most importantly, cutting costs elsewhere.