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When Your Payroll Is Completely Out of Whack
Your payroll expenses are too high. It's a common problem for many small retailers, and the issue usually stems from two areas:
•You're scheduling too many people to work a shift
•You're paying too much
Or both. Luckily, the fix is easy.
The first step is to track your hourly sales for a week or two to figure out what time of day the majority of your customers are shopping, then start scheduling your staff accordingly. Cut payroll hours during less busy times and bulk up payroll hours during busier times. How many sales people do you realistically need to service the customers walking in during given times throughout the day? If the majority of your sales happen between 12-2 p.m. and 4-7 p.m., why do you have four people on staff at 3 p.m.?
Step two involves making sure you've spread your hours correctly across days of the week. Just look at the daily sales over, say, the previous month, take a four week average for each day, then allocate the same percentage of payroll to that day as well. If you do 10 percent of your sales on a Monday, allocate 10 percent of your payroll wages for that day. While it's not always perfect, this is a great rule of thumb to ensure you're focusing your sales efforts when your customers are shopping most.