Retailers that keep staffing low risk losing customers and sales
- According to a MarketWatch opinion piece, retail managers are routinely understaffing their stores at the expense of serving customers and increasing sales. Rogelio Oliva, a visiting professor at the MIT Sloan School of Management, says that even a slight increase in staff would generate enough sales to cover the labor cost. Oliva is coauthor of the study "Traffic-Based Labor Planning in Retail Stores."
- In determining the right staffing level, Oliva says the traditional method of tying labor to sales is ineffective because retail sales are affected by store traffic. Another problem with the labor-to-sales tie is that sales are based on what customers actually bought and doesn't include what they might have bought if they had had staff assistance, he added.
- Oliva said he and a team of associates developed a staffing method that ties labor to incoming traffic. Based on his research, retailers’ attained between 85% and 95% of their sales potential with their current staffing levels, but could achieve 99% of potential sales potential by tying labor to customer traffic.
Turnover in retail is known to be high; that, along with cost-containment, might contribute to low staffing levels. But this can lead to scheduling stress and low engagement — a big problem during the busy holiday season, when more employees are needed to keep up with demand.
Giant retailers like Walmart are trying to address retention problems through benefits and training. However, leaving customers without enough staff to answer their questions or help with a purchase directly affects sales. Lowes responded to a decrease in its sales in August by extending workers' hours so they would have more face time with customers — but that caused some to raise questions about burnout.
Some employers focused their holiday hiring on remote positions, as more customers turn to the Internet for their shopping needs. Customer service over phone or web chat is an increasingly important part of e-commerce, and remote work is growing in its appeal to potential employees. For in-house employees, a focus on varied experiences and development opportunities can keep them engaged and happy in the long-term.