How Retailers Can Adapt to Minimum Wage Hikes
The rising minimum wage wave has already hit many cities and states, with no plans of slowing down anytime soon. As wage increases become a not-so-distant reality, retailers are beginning to feel the heat. Employers are now challenged to offset wage hikes without losing valued workers. That's easier said than done.
While many stores may raise their prices to make up for increased labor costs, this puts them in a vulnerable position. E-commerce giants like Amazon.com have mastered automated ordering and distribution, significantly cutting their labor costs. As the competition heats up between online and brick-and-mortar retailers, low prices are a critical factor that many stores can’t risk.
It’s important for retailers to realize that wages are only one piece of the puzzle. Instead of cutting jobs or hiking prices, retailers can use employee engagement platforms to cut important costs such as training, turnover and scheduling. Here are three ways employers can invest in their workforce to save time and money in the long run:
1. Streamline the scheduling process. Allowing employees to input their own availability is one of the easiest ways employers can cut costs. With employee engagement platforms, workers can share their schedules through desktop and mobile applications. This empowers employees and gives them a say in the administrative process, rather than building communication barriers between upper management and staff. It also saves managers’ time, getting them out of the back office and onto the sales floor.
Additionally, availability-based scheduling can cut turnover costs. According to a recent study by WorkJam, 62 percent of managers say associates have quit their stores due to scheduling conflicts. When workers have power over their own schedules, they feel more motivated to stay on board. Reducing turnover saves employers all the costs and headaches that come along with the recruiting and onboarding new employees.
2. Cut overtime costs. Although the federal overtime regulations have been put on hold, retailers now have more time to prepare for the possibility that this, or another regulation, gets passed and imposes yet another wage obstacle. WorkJam’s study found that 70 percent of retail managers clock extra hours to handle administrative duties like reassigning and swapping shifts. Employee engagement platforms can help avoid overtime costs by making sure managers aren’t working extra hours to rearrange schedules. Furthermore, they can help managers better compare staffing levels with expected demand to prevent understaffing.
3. Expand training to increase versatility. With higher wages, retailers need to maximize every second that a worker is on the clock. When employees are separated into specific roles and positions, they often can’t jump from one task to another with ease. Retailers can easily make available ongoing training and assessments through employee engagement platforms to make their employees more flexible and efficient. For example, when workers are trained in a variety of areas, an employee who was previously only responsible for stocking can switch over to the cash register when demand increases. In this instance, the stock employee isn’t paid for downtime and cashier employees don’t have to accommodate for a busy period with extra hours.
Wages may be top of mind, but laying off workers is a short-term solution to a broader issue. With less hourly workers on the sales floor, stores can experience understaffing — leading to lost sales and overworked and unhappy employees. And in turn, poor service begins to emerge. If retailers want to avoid this domino effect, they should focus on optimizing their pre-existing workforce through self-service scheduling, efficient administrative processes and amplified training. Doing this allows retailers to stay afloat without forgetting their most valuable asset — an engaged workforce.
Steven Kramer is the CEO and co-founder of WorkJam, an employee engagement platform.