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When it comes to running physical retail stores, many businesses struggle with one major concern: are they overstaffed or understaffed? Finding and ensuring optimal staffing levels is critical to improving the efficiency of a retail business. If a store is understaffed or overstaffed, either condition will have a deep effect on the behavior, productivity, and attitude of the store staff.
If a store is understaffed…
If a retail store is understaffed, it will encounter staff morale issues, employee burnout, excessive overtime, and difficulty in training and relief coverage. If understaffing is sustained for extensive periods, store service will be affected negatively, and there will be a high employee turnover. This will also reflect on the reputation of the brand.
If a store is overstaffed…
Overstaffing can become very costly for retail stores, but it can be avoided through proper monitoring of store traffic and employee productivity levels. When a retail store is overstaffed, there are issues related to payroll and benefits. Too many employees would result in a low average salary and fewer employee benefits as the store must manage expenses based on revenues. Overstaffing also promotes a monotonous culture if employees are not utilized properly. This also results in lower sales and increased operational costs which eventually reduce revenues.
The key to obtaining optimal staff levels
The key to optimizing staff levels is to think creatively and get help from a footfall and in-store analytics solution that would track, evaluate and monitor key staff performance indicators. Such a solution will offer retailers crucial footfall metrics such as Visitor per Staff Hour (VPSH), Transaction per Staff Hour (TPSH), Revenue per Staff Hour (RPSH), and allow them to assess the health of their service level at a mere glimpse.
Shopper Value, a footfall analytics solution, allows its users to automatically track and monitor the VPSH, once the benchmark is set. You can define the threshold level as:
The Excessive threshold will show that the store is overstaffed and a reduction in staff levels is required. The Healthy threshold shows the store has optimum staff levels. All values beyond the threshold marked as Compromised will represent the Degraded service level, the implications of which almost always affect the conversion negatively.
Users can mark these four thresholds and generate reports to gauge the status of the Staff Hours.
To achieve an optimal level of service, the most ideal situation for the stores is to have a higher percentage of staff hours in the healthy range. Excessive staff hours will increase the staffing cost for the business, while staff hours in the compromised/degraded range will be detrimental to sales.