As part of our consulting and strategizing sessions, using a tool we have developed called "Profit Explorer" we invariably come to the part of the session where we review wages as percentage of sales. Fairly regularly we find the stores which are not as profitable as they'd like to be have high wage costs in relationship to sales. Often, however, the manager is very defensive, arguing vehemently his need for his current personnel level. But I'm also amazed how often in those same stores, during inevitable slow periods, I see the employees standing, waiting, and talking. Even so, I always observe during my short visits a laundry list of things that need improving in almost every store: signs needing changed or redone, product needing faced or dusted, clutter needing attended to....well, you get the picture. My point is this: if your current personnel level allows everyone to feel that there is plenty of time for anything other than the next task that is right in front of them as part of their assigned responsibilities, you probably have too much personnel.
You may argue that you maintain the level of personnel you do so that you are assured that each customer is attended in a timely fashion. I would have several points to make to you: 1. If you teach your personnel to acknowledge each new person who comes into your store, most will wait somewhat patiently for their turn. 2. Study your times of highest traffic, schedule personnel accordingly and cut back during slower periods. 3. As part of the regular store meetings you should be having, teach techniques to speed your sales process. 4. During this same period share with your personnel the fact that you must start monitoring production per employee to survive these challenging times (although you should monitor these factors during the best of times too).
Parting shot: Some managers find paring personnel extremely unpleasant. But your cost of wages is one of your largest expenses so make sure you are receiving maximum return on that investment.
