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- Title
Enhancing Retail Stores' Performance: Managing Compensation Costs with Optimal Retail Workforce Sizing.
- Authors
Madhani, Pankaj M.
- Abstract
Retail workforce optimization keeps store employees happy, improves customer service, and reduces opportunity costs of lost sales. As workforce compensation costs constitute one of the largest components of retailers' operating costs, there is a widespread tendency to understaff to save on those costs. In the case of workforce undersizing, when a retailer decides to increase the size of the workforce, the additional workforce not only generates incremental revenue with better sales conversion but also has a positive impact on workforce morale, as the workforce is not overstretched. It also results in higher retention of the retail workforce. Improved retail workforce retention leads to lower hiring and training costs and improved store performance. On the other hand, retail workforce oversizing results in higher payroll costs and decreased engagement of retail employees. Hence, there is a need to find the right number of store employees to provide consistent customer service even during the period of volatile store traffic and still manage compensation costs favorably. The research provides various frameworks to investigate whether retail stores are properly sized and studies the impact of optimal workforce sizing on retail workforce compensation costs and ultimately on store performance.
- Subjects
RETAIL stores; LABOR costs; LABOR supply; BATTERY storage plants; JOB involvement; OPPORTUNITY costs
- Publication
IUP Journal of Business Strategy, 2021, Vol 18, Issue 1, p7
- ISSN
0972-9259
- Publication type
Article