Reducing costs in the Retail industry with income streaming
UK retailers store profit margins have halved in the last 8 years. With more and more consumers turning to online shopping, retailers need to find new ways to cut their costs and bring back the high street experience.
The Retail Economics Retail Cost Base Index shows that operating costs rose by 2.4% in 2018 and by 10.8% over the last five years. Retail space, labour costs, distribution and utilities are all recognised as fairly rigid and expensive overheads. Recruitment, replacing and training new members of staff can make up a large part of labour costs and can often be left unaddressed as an inevitability of a transient workforce such as in Retail and other industries a like.
Oxford Economics calculates the overall cost of recruiting, replacing and training a member of staff in retail at around £3,874. With the average attrition rate for the industry at around 8.3%, with many retailers experiencing even higher percentage of leavers, a retailer with 10,000 staff could be spending around £3,215,420 per year on hiring and recruitment costs alone. It’s clear that there are significant savings to made in this area by reducing staff turnover.
A recent survey found that almost 50% said that financial worries are causing employees the most stress in life and that 48% said that their financial worries affected them at work. Whilst financial worries may not be the only contributing factor to turnover issues, it can’t be denied that supporting your staff’s financial wellbeing in an effective way will strengthen employee loyalty to your brand. In addition, practically, staff are less likely to leave for another brand that does not support them in this way.
Immediate reduction in attrition
A well-known restaurant group are already making significant strides in reducing attrition by supporting staff financial with tangible solutions with income streaming. They’re using Wagestream to give their employees access to flexible income to help create a stronger link between work and what employees earn.
Implementing Wagestream across their workforce has seen a 16% reduction in attrition compared with monthly projected attrition without Wagestream.
This reduction in attrition means a £1.1million cost saving for their business, and means they’re able to retain the best staff that are more knowledgeable and experienced in their roles.
Income streaming can do more than reduce recruitment costs
When employees are able to track and access what they earn as they earn it, they naturally want to work more hours. We have found that employees who are actively using Wagestream have done on average, 22% more hours per month.
What’s more, 53% of users said that they feel less distracted by their finances at work due to Wagestream. This means that even with more hours worked, your staff are more productive when at work, improving your overall level of service, something that’s key for an industry that’s battling online takeover.
Financial wellbeing with Wagestream
Wagestream gives employees the power to access and track their earned wages as and when they need it, automatically stream wages direct into their savings account and provides independent money management tips. It’s available to 100% of staff, 100% of the time so your staff never become financially excluded or need to turn to borrowing, adding to financial stress.
In return you get a workforce that trusts you as an employer, stays loyal for longer and are more focussed on the job at hand.
Wagestream is a simple technology solution that can give you a business advantage, while at the same time, improving the lives of your employees.
Wagestream has no impact on payroll or cashflow, and integrates with all workforce management and attendance systems.
To understand how Wagestream can contribute to reducing your business costs, get in touch.