Bookselling in Tough Times: Staffing

During tough times, it's imperative that booksellers control costs. Payroll represents approximately 20 percent of a store's costs (while inventory constitutes 60 percent), so taking control of staffing is crucial for stores looking to weather economic turmoil. Today, in a letter to booksellers, ABA CEO Avin Mark Domnitz recommended taking "a look back at last year's payroll for the holiday season and comparing it with sales. If [this year's] sales are down 10 percent, then payroll should be trimmed. There is no one-size-fits all solution here, but, again, the object is to staff the store at the level that maximizes sales. If sales are below budget, you must adjust controllable expenses."

This week, Bill Reilly of The River's End Bookstore in Oswego, New York; Dan Chartrand of Water Street Bookstore in Exeter, New Hampshire; Carla Jimenez of Inkwood Books in Tampa, Florida; and Chuck Robinson of Village Books in Bellingham, Washington, share their insights on staffing during economic uncertainty.

One way to minimize compensation costs is through better scheduling. "We're going to try to spread staff out more evenly," said Village Books' Robinson. "Due to staff requests, we might have been overstaffed at times simply because we wanted to accommodate the request of staff members, rather than the needs of the store."

Chartrand noted that he will look at overlapping shifts at Water Street Bookstore in an attempt to minimize costs and maximize staffing efficiency. Also, "the owner is going to take some shifts, too. There's nothing like leadership from the front. When you start adding up $10 here and $10 there, it makes a difference."

Cutting payroll without understanding how it will impact the customer experience can lead to a downward spiral -- especially at an indie bookstore, where consumers are very much accustomed to receiving excellent customer service. Fewer staff to shelve, merchandise, and sell can lead to unhappy customers, and that can lead to a further decrease in sales...

"You need to be careful not to cut staff dramatically," Chartrand said, explaining that staff is the store's "heart and soul" and "drives" an independent bookstore. "[A good staff] brings people into the store. I'm not resistant to making strategic cuts in staffing, but there is a delicate balance." He suggested studying the patterns of customers flowing into the store, and the ability of currently scheduled employees to meet their needs, and then making decisions about staffing levels based on that knowledge.

"Cutting staff is not the best thing if customers can't get the help they need -- you will lose sales," Robinson stressed. "The key is being properly staffed. Restaurants send people home during slow times -- you need flexibility in hours."

Many booksellers use seasonal workers and/or part-timers, and how they make use of these employees can make a big impact on the bottom line. "We reduced staff at the end of the summer," said Reilly. "Traditionally, we would have two college students on staff, but when two left after the summer, we only replaced one. So there will be fewer of us doing the same amount of work. Everyone has to shoulder more responsibility." River's End generally has a staff of eight people, but the store has reduced it to six. "That's a 25 percent reduction, which is significant for us."

For Inkwood Books, summer is a slow season, and the store cuts back on staff during that time. However, Jimenez said she's not ready to increase staffing just yet. "Going into the fall, there will be a little more of keeping staffing at the same levels as the summer. We're going to play it by ear -- it's been pretty darn quiet for the last few weeks."

If you're anticipating a decrease in sales, it would be irresponsible to budget an increase in staff pay, but you do want to retain your staff and keep them happy -- after all, they're one of the keys to staying competitive in the marketplace. When an increase in salary is not in the cards, other incentives, including employee discounts, flex-time, and special rewards for a job well done, can show employees they are valued. Some retailers have even replaced regular wage increases with profit-sharing programs that tie monetary rewards to the success of the store.

For more on employee incentives, read the January BTW article "Creating a New Solution for Compensation" and see ABA's growing list of resources to help booksellers weather the current crisis, featured on BookWeb.org. --David Grogan