The Semi-Annual Employee Clearance Event

Every retailer is in a seasonal business. Sales go up and down in a predictable pattern depending on the time of year. When sales increase, retailers add employees and when sales start to decline, business 101 dictates firing employees to reduce payroll expenses.

It doesn’t matter that sales will pick up in a few months, retailers can’t handle even a couple slow months of lowered profitability. The irony is that when sales rebound from their seasonal lows, these same retailers will be hiring like mad.

So right now we are in the first of our two “Semi-Annual Employee Clearance Events”.

During this event, retailers play what I like to call Payroll Poker. In this game, retailers try to reduce the number of employees in the store while betting that customers won’t notice. If played correctly, the shoppers will continue to shop, and buy, even though there is a significant decline in the service provided by the retailer. If the retailer can keep the game going long enough, then the reduction in service will not drive down sales, while the lower labor costs improve profitability.

The thing is, customers are not stupid. They notice immediately when labor costs are lowered in the store. When shoppers can’t find what they want, or if they can’t get their questions answered regarding what they plan to buy because employees are non-existent …then they don’t buy. They simply leave and many vow never to return. Payroll Poker is a game that is won by the retailer only in its own corporate mind.

As service levels drop, due to insufficient staffing, the resulting decline in sales is chalked up by corporate know it alls as a symptom of the seasonality of the business.

Right now, due to our Semi Annual Employee Clearance Event, I have been covering three separate departments by myself. In good times, my single department is staffed by at least two and in most cases three employees.

I have personally seen between $300 and $500 in sales walk out the door in an hour because I couldn’t get to the customers to help them, or if I could get to them, then I didn’t have the knowledge necessary to answer their questions. So rather than ante up in the game of Payroll Poker, the customers simply folded and walked out.

On several occasions I have been faced with customers actually crying because they can’t find what they are looking for or anyone to help them. These poor individuals feel as though we are taking an active part in making them feel less than human. And perhaps we are, but it’s not personal, it’s only business.

Crying is an extreme example; most customers just seem to wander the cavernous store in a daze, hoping that someone will point them in the direction of the replacement furnace filters.

Nowhere in the corporate accounting system is there a ledger entry which records the dollar amount lost in these cases. There is no Excel spreadsheet column marked “sales lost due to pissed off customers”. There is also nowhere to track the amount of dollars lost because overworked and exasperated employees have simply stopped talking to customers that they can’t help.

In my experience, there is little in the world of retail that is more energy sapping than being forced to face exasperated customers. No employee wants to deal with a customer who has been wandering the store for the good part of an hour while trying to find what they want to buy or someone to help them. As an added benefit to the shopper, when they finally find me, I am not able to help them in the least because they are asking questions that I have no hope of answering.

In such cases it is not unusual for a customer to take out his or her frustrations on the only symbol of corporate malfeasance they can find; namely me. I have been cussed out, threatened and made to hear over and over again a litany of complaints about how our lack of concern for the customer is, in various cases;

Rude, bad business, inconsiderate, despicable, unacceptable, Frickin’ ridiculous, stupid, Frickin’ stupid, mean, nasty and downright inhospitable.

So as a defense mechanism, most employees simply stop trying to help customers in this situation. As labor cost decline, the number of angry customers that no one wants to help increases. We go from being a DIY retailer to a GIY retailer. From “Do It Yourself” to “Get IT Yourself”.

Service levels drop, employee enthusiasm declines and sales go into the tank.

The feeling among customers and employees during this game of “Payroll Poker” is amazingly similar. Neither the shoppers, nor the people paid to help them, actually want to be in the store.

The kick in the pants in this whole game is that eventually the Corporate Brain Trust decides that the level of non-service is unacceptable and they order the stores to add more staffing. This leads to a rush in hiring and the inevitable extra costs incurred to screen, hire and train all those new employees.

So soon the Employee Clearance Event will be replaced with the Hiring Anyone with a Pulse Celebration. Then the store will be crawling with clueless newbie’s who have no trouble telling customers that they have no idea where the furnace filters are. But hey, that’s retail!