At a leadership summit a couple of years ago, I stated that rent and wages were unsustainable in the retail industry and that they would need to drop. I did not have much resistance regarding rent, but Russell Zimmerman, for whom I have a great respect, balked at the notion that salaries could drop.
We will see what happens in the future, but I think Russell could be right. He mentioned at the time that there may be ways of reducing wage bills and cited the self-service checkouts, which were reasonably new then.
It is probably already happening at an informal level, but I wonder whether the notion of staff sharing may be one remedy to reducing payroll.
Take two smallish shops alongside each other. One is, say, a handbag store, and the other sells home wares. Not a hint of competition. Both stores need a minimum of one staff with a part-timer to cover lunch. What if they shared the part-timer, with one manager going to lunch at, say, noon and the other at 2pm?
You say that this is fraught with issues, especially if this is formalised, with the unions first in line to shoot it down. Then there will be dozens of obstacles ranging from taxation, OH&S and a zillion others.
Several months ago I wrote that Woolworths South Africa may make a bid for Myer. This was before Bernie burnt his brookes. I was shot down by some of my colleagues, mainly citing ASIC’s inevitable interference. But I believe that if something makes economic sense, the red tape will ultimately have to go.
Staff sharing could involve a small pool of well-trained, flexible and knowledgeable people on standby in a shopping centre. There could be some ‘regular’ arrangements, such as every lunch hour, or some ad hoc arrangements, such as a shop manager falls sick and the store needs to open.
The idea is not new in the sense that temp agencies have been fulfilling this need for years. Where this concept differs somewhat is that this would be a cooperative between retailers to reduce wages, with no additional fees and a quicker fulfilment time.
The theory needs work. After all, it is only a concept at this stage. On the broader level regarding productivity in general, some smaller retailers have instilled a work ethic where staff are always looking for things to do in the quieter times. In other instances, and I noticed this a week or two ago in a department store in Campbelltown, there was a team member who may as well have been a mannequin. I am not sure whether this young lady had looked Medusa in the eye. Medusa was the mythological Greek monster, a Gorgon, generally described as having the face of a hideous human female with living venomous snakes in place of hair. Gazing directly into her eyes would turn onlookers to stone.
The team member did not move, while there was plenty of blatantly obvious work to do. We cannot afford to pay one cent in wages where there is zero productivity. We must look for ways and means to reduce our wage bill.
Stuart Bennie is a retail consultant at Impact Retailing www.impactretailing.com.au and can be contacted at email@example.com or 0414 631 702