As Omicron peaks, staffing has never been a more critical issue for retail businesses. The first article in our retail thrive series - which explores the 5 key trends facing retailers this year and how to turn these into opportunities - looks at what you can do in the short and longer-term to overcome the staffing challenges currently sweeping retail businesses across Aotearoa.
In the short term – overcoming the Omicron peak
Retailers have it tough. Stores are shutting due to being understaffed, and the ones that can remain open have stressed employees who are often covering more than one role. Add to this the increased staffing costs from 1 April as the minimum wage increases by $1.20/hr, and fewer customers coming through your doors because they’re isolating or simply not going into CBDs at the moment, and it’s clear that many retailers are feeling the pinch.
Prioritise the tasks that bring in revenue
However, there are things you can do to minimise the short-term impacts of Omicron. “If you’re understaffed, review your business operations so that you understand what your business critical tasks are (i.e. the tasks that get money into the till),” says Justin Martin, Retail Sector Lead, BDO. “It’s important to make sure your employees are focussed these, not spending time on things that are nice to have but aren’t going to bring revenue in in the short term. For example, getting that customer’s package onto the courier in time is likely to be more business critical than organising your stockroom.”
If you haven’t already done so, creating a business continuity plan can help you identify your key business processes and contingency plans when interruptions occur. Talk to your BDO adviser about how we can assist or find out more here.
Let your customers know about alternative services
For retailers that have an online component, it’s important you let your customers know about this. They may have only experienced your in-store services and are less familiar with purchasing from you online. Look for ways to promote your online offering or any other special products or services you’re providing - social media is particularly effective for this. If your employees are isolating but are feeling well and able to work, you could also consider what other tasks they may be able to complete remotely. Are there any administrative tasks they could carry out, or perhaps they could craft a helpful email to your customer base detailing how to access your services during Omicron.
It's also a good idea to consider whether there are additional ways for you to reach your customers. For example, even though they may not be able to come in store, if a lot of your regular clientele are isolating, could you offer them a care package that showcases a new product?
Finally, review your financial position to see if you’ve experienced a 40% decline in revenue over a seven-day consecutive period. Check the detail and see if you may be eligible for the COVID-19 Support Payment. You may also be eligible for the COVID-19 Leave Support Scheme, which enables you to pay employees who are unable to work if they have to self-isolate. You can read more about both of these schemes here.
In the medium to long-term – Keeping your staff and attracting new employees
The borders are opening, and that means we’re likely to see a lot of employees going overseas in the coming year. The big question facing many industries in New Zealand is how to respond to this challenge.
You can start today by continuing to show your employees how much you value them. Many of them will have been working long shifts to cover other staff who might be isolating and they are likely feeling pretty exhausted. Giving them little gifts - even if it’s just a box of chocolates or a nice bottle of wine to show you appreciate them - doesn’t take much off your bottom line, but will be something your staff value and will remember in future when thinking about alternative options.
Retail as a career
Longer term, it’s important to consider why staff might leave. “Often employees don’t see retail as a genuine career, it’s something they do when they are younger and before they move into other jobs,” says Greg Harford, Chief Executive, Retail NZ. “This doesn’t have to be the case – many retail businesses, particularly larger chains, create clear career paths for their people, providing ways for them to upskill and move up the ranks.” When you’ve managed to pass the Omicron peak and have a little more spare time, it’s a great idea to create clear career paths for your employees so they know that they have a future with you and will continue to develop if they stay.
Likewise, with the borders opening, we should see more people coming to New Zealand’s shores this year. With strong career plans and a well thought-out employee value proposition (i.e. why someone should work for you instead of somewhere else), you will be able to attract the best people, with a flow-on effect ultimately to the customer experience and your bottom line.
If you would like some independent advice for your business, want to know whether you’re eligible for any government support payments, or need help creating a business continuity plan, BDO’s specialist retail sector team can help. Contact your local office today.