Question 1

What should be included in 'Total Staffing Cost'?

Accepted Answer

You should include all costs associated with your employees. This means gross wages and salaries, payroll taxes (like FICA and unemployment), health insurance premiums paid by the company, retirement contributions, and any other employee benefits.

Question 2

What is a good staffing cost percentage for a retail store?

Accepted Answer

For most retail stores, a staffing cost percentage between 15% and 25% is considered healthy. Luxury retail with high-touch service may have a higher percentage (closer to 30%), while a large, self-service format might be lower.

Question 3

How can I lower my staffing cost percentage?

Accepted Answer

You can either decrease costs or increase revenue. To decrease costs, optimize schedules to match customer traffic, reducing overstaffing during slow periods. Cross-train employees so they can perform multiple roles. To increase revenue, focus on sales training to improve conversion rates and average transaction value.

Question 4

Is a very low staffing cost percentage always a good thing?

Accepted Answer

Not necessarily. While it looks good on a spreadsheet, a percentage that's too low (e.g., under 10-12%) could indicate that your store is understaffed. This can lead to long checkout lines, a messy sales floor, poor customer service, and ultimately, lost sales.

Question 5

How does this metric relate to employee productivity?

Accepted Answer

This metric is a high-level indicator of team productivity. If your sales are increasing while your staffing cost percentage stays the same or decreases, it's a strong sign that your team is becoming more productive and efficient at generating revenue.

Staffing Cost vs. Sales Revenue

Results

Understanding Staffing Costs

Frequently Asked Questions

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