Labour is typically the largest controllable cost in retail and the one most directly connected to sales. Roster too thin and you lose sales and irritate customers; roster too heavily and margin disappears.
Roster to actual trade
Most retailers have far better data than they use. Point of sale systems record transactions by hour, which tells you when customers actually arrive rather than when you assume they do.
Useful measures:
- Sales per labour hour, tracked by day and by time block.
- Transactions per hour, which drives service requirements more directly than dollar sales.
- Wage cost as a percentage of sales, weekly, against a target appropriate to your format.
Then match the roster to the pattern rather than to habit. Many stores are overstaffed in quiet mornings and understaffed at genuine peaks because the roster was set years ago.
The employment rules that constrain you
Availability provisions. Requiring an employee to be available beyond guaranteed hours is only lawful where the agreement contains guaranteed hours, there are genuine reasons based on reasonable grounds, and reasonable compensation is paid for the availability. Zero-hour arrangements combining no guaranteed hours with a requirement to be available are not lawful.
Shift cancellation. If the agreement permits cancelling shifts, it must specify reasonable notice and compensation where that notice is not given. Without such a provision, the employee is entitled to what they would have earned.
Breaks. Rest and meal breaks are a statutory entitlement, with number and duration depending on hours worked. In a small store these are genuinely difficult to schedule and they are still an entitlement.
Secondary employment can only be restricted where there is a genuine reason based on reasonable grounds relating to the business, stated in the agreement. Many retail employees hold more than one job.
Casual employment done properly
Genuine casual employment involves no obligation on the employer to offer work and none on the employee to accept it. That flexibility is legitimate.
Where a “casual” works a regular pattern over an extended period, the arrangement may in substance be permanent part-time employment, with the entitlements that follow. Regular rostered hours over months point strongly in that direction.
Seasonal peaks
Retail peaks are predictable, and the businesses that handle them well recruit early.
- Start recruiting well ahead. Good seasonal staff commit early.
- Train before the peak, not during it. Someone learning the point of sale on the busiest day costs sales.
- Use fixed-term agreements correctly — genuine reason based on reasonable grounds, stated in the agreement. Where the requirements are not met, the employment is permanent.
- Bring back last year’s people. Returning seasonal staff need almost no training and are the cheapest capacity available.
- Plan the public holidays. Working a public holiday attracts time and a half plus, where it is an otherwise working day, an alternative holiday. Easter and Christmas trading restrictions also apply in some circumstances.
Wage cost versus service
Cutting hours is the fastest way to protect margin in a slow period and it has a cost that does not show in the wage line. Understaffed stores lose sales, generate complaints and burn out the staff who remain.
Before cutting, look at whether the hours are in the right places. Moving hours from quiet periods to peaks often improves both cost and service without reducing the total.
Retention
Retail turnover is high and each departure costs recruitment and training, plus the productivity gap while someone learns.
What retains retail staff: predictable rosters published in advance, being asked before hours change, genuine breaks, progression that exists, and managers who are trained to manage. Most of these cost nothing.
The coming leave change
The Employment Leave Act moves annual and sick leave to hours-based accrual from day one, with a 12.5 percent upfront payment in lieu on casual and additional hours. It commences in 2028 after a two-year implementation, with the Holidays Act applying until then.
For retailers with large casual workforces this simplifies a genuinely difficult area, and it is a payroll project worth starting early.
Employment New Zealand publishes guidance on availability, breaks, public holidays and casual employment, free at employment.govt.nz.
General information only, not legal advice.
