The retail industry plays a vital role in the UK economy, accounting for nearly 10% of national employment. However, this sector is also among the most heavily impacted by rising costs, from increased business rates and labour expenses to supply chain inflation.
For many retailers, the question is clear: how do you manage rising costs while maintaining employee engagement and staying competitive in a fast-moving market?
With a little bit of technology and some strategic initiatives, HR can be the key to combatting rising retail costs.
Staff smarter, not harder
According to the Office of National Statistics (ONS), labour costs contribute to 39% of total operating expenses. While these costs cannot be avoided, the opportunity lies in managing them more intelligently. By adopting smarter scheduling and data-driven planning, for example, retailers can better control labour spend:
- Smarter scheduling: Imagine knowing exactly when your stores will be bustling and when they’ll be ghost towns. With the right workforce management tools, you can do just that, helping you schedule the right number of employees at the right times.
- Labour cost insights: Got too many employees on the shop floor? That’s unnecessary expenses. Not enough? That’s unsatisfied customers. By leveraging advanced forecasting tools that predict staffing requirements based on historical data, local events, and event weather patterns, retailers can achieve an optimal staffing balance that supports productivity, cost control, and positive customer experiences.
But working smarter, not harder, doesn’t just mean having these insights. In fact, without automation, these insights can quickly become a headache – taking up valuable time and resources trying to piece together the perfect schedule.
In order to truly work smarter, you want a workforce management system that takes all the information available – including footfall, sales spikes and employee availability – and generates the best possible schedule in minutes. These systems don’t just create schedules – they offer dynamic functionality like automatic shift adjustments based on overtime thresholds, and compliance with UK employment laws.
Plus, with built-in notifications, you can instantly alert employees to changes in their schedules, minimising confusion and last-minute disruptions. This allows managers to save valuable time and redirect their focus on higher-value tasks, like employee growth and development.
Prioritise employee happiness
As operational costs continue to rise, employers struggle to raise wages, leaving employees to deal with mounting expenses – including increased rents, grocery bills and holiday spending. This stagnation in pay pushes many to seek greener (or better-paying) pastures, leading to higher turnover costs that can burn a hole in your budget. A 150% – 400% hole for that fact.
So, what can you do to keep your team happy and reduce turnover costs when pay raises aren’t always an option? Show them you care in other ways. Invest in an all-in-one HR and Pay system that streamlines processes, empowers employees, and makes managing their day-to-day work lives effortless.
Give power to the people
With a self-service HR and WFM system, employees can book time off, manage their schedules, and swap shifts without needing to rely on HR or their line manager. To maintain compliance, the system automatically restricts shift swaps to employees in the same role. For example, sales assistants trained on the till can only exchange shifts with colleagues who have the same skills – ensuring every shift is staffed with appropriately trained team members.
ELLA – Zellis’ AI tool – makes the process even smoother by providing real-time responses to employee queries, like checking shift availability or requesting scheduling changes. With ELLA, employees have a virtual assistant at their fingertips, making HR interactions faster, smarter, and much more convenient.
Flex your schedules
While flexible working can be challenging in retail environments – particularly during peak trading hours – it should not be dismissed as unworkable. Even limited flexibility can make a meaningful difference to employee satisfaction and retention. By using workforce management systems that take individual availability and preferences into account, retailers can accommodate reasonable adjustments without compromising operational coverage. For example, aligning schedules with childcare commitments or supporting temporary changes during exam periods can strengthen loyalty, reduce turnover, and create a more engaged and committed workforce.
In short, prioritising employee happiness is not a cost, it’s actually an investment. If you want loyalty in a time of uncertainty, show your team you’re in their corner.
Introduce Earned Wage Access (EWA) schemes
1 in 10 UK employers are supporting their employees’ financial wellbeing through Earned Wage Access (EWA) schemes. Earned Wage Access is not a loan or a form of credit, rather, it allows employees to draw down wages they have already accrued, providing flexibility during periods of financial pressure.
By enabling employees to better manage their cash flow, these schemes help individuals take greater control of their finances, contributing to a happier, more supported workforce.
Cut the admin chaos
Manual rota adjustments and administrative troubleshooting are rarely the best use of HR’s time, particularly in a cost-conscious retail environment. These activities consume valuable hours, diverting attention away from strategic initiatives. So, to gain back time, embrace automation.
Accurate time management and attendance
During times of economic pressure and tight budgeting, ensure every penny you spend is justified and accounted for. This can be helpful during the holiday rush. Employees can clock in via mobile, managers can monitor attendance in real-time, and with alerts for no-shows or excess overtime, you can reduce the need for constant manual intervention – saving time and preventing overspend, all while keeping the shop floor fully staffed.
Go digital on notifications
Communication delays often lead to last-minute scrambles and unnecessary admin. By digitising workforce notifications, HR professionals and store managers can share updates instantly without back-and-forth emails or calls.
Say, for instance, there is a gap in the schedule for a colleague with pricing labelling experience. While your workforce management and scheduling system should automatically update you on available and capable employees, it’s also important to keep the whole workforce in the loop (with minimal administration).
To do this, put out a notification on your internal newsfeed and give team members the chance to step in and take on extra responsibilities. This will help them develop new skills, keeping them motivated and engaged. You might even uncover new talent for future openings, reducing recruitment costs while fostering a more versatile team.
Using your workforce data to stay two steps ahead
If you don’t have visibility of your real-time headcount numbers, it’s nearly impossible to manage labour costs effectively. Similarly, if you don’t know your historical sales data or foot traffic trends, it becomes difficult to predict future staffing needs and plan accordingly.
Use your data to see the bigger picture, and identify trends that can help you tackle rising labour costs.
Take, for instance, overtime payments. By analysing your HR data, you may see that certain stores or departments have a higher rate of overtime than others – potentially pointing to scheduling or staffing issues that need to be addressed. Or, if you notice a trend of higher foot traffic during certain times or seasons, you can adjust your schedules and staffing levels accordingly to ensure optimal coverage without overspending.
Operational costs are tough, but you’re tougher
Rising operational costs in the retail sector aren’t going away anytime soon. But, it also shouldn’t be the stumbling block for your HR strategy.
By embracing software like ZellisONE, you can show both your colleagues and your customers that you’ve got what it takes to navigate tough economic times with ease.
Key takeaways
- HR can play a central role in managing rising retail costs by leveraging technology and strategic workforce initiatives
- Smarter scheduling and data-driven planning help optimise labour costs while maintaining productivity and customer satisfaction
- Prioritising employee happiness through scheduling flexibility and self-service HR systems helps to reduce turnover and boost engagement
- Earned Wage Access schemes provide employees with greater control over their finances, contributing to wellbeing and retention
- Using real-time workforce and operational data enables proactive decision-making to control costs
Unlimit What’s Next with ZellisONE
See how ZellisONE can help you manage rising operational costs, while setting your HR strategy up for long-term success.
