In the retail world, the holiday season is “go time,” when a spike in customer traffic and gift buying brings more sales. However, this time of year will be anything but merry and bright if you don’t anticipate the rush and staff up accordingly.
Although it’s clear that you may not meet all the demands of the busy holiday shopping season without extra help, it may be less clear what to do: Hire a few seasonal workers or pay overtime to the staff you already have? Here’s some guidance on this all-important decision:
- Run the numbers. First things first: Look at past years’ figures to see what you can expect. With this benchmark, you’ll have a better idea of your store’s end-of-year earnings and whether it makes sense to hire short-term, seasonal workers – or pay overtime to full-time employees and bring temporary workers to work full-time for a limited period. In general, it will cost more — in time invested upfront and total payroll costs — to hire seasonal workers for the holiday season.
- Consider all aspects of seasonal employment. Where do you need the most help? Depending on your store’s needs, you can be selective in the types of work roles you’re looking to fill — from unloading trucks and stocking shelves to setting up holiday displays and serving customers. Some roles require more training and hands-on assistance than others, so keep that in mind as you seek to round out your seasonal staff. Working with a staffing agency can help you manage the tax, legal and financial requirements of your seasonal hires, in addition to providing an early estimate of overall costs. This calculation can help you decide whether to rely on an agency to manage the hiring process or hire seasonal workers on your own. If you decide to do it yourself, be sure you’re familiar with the employment laws for your state and city. State and city laws may be more generous than the federal ones on matters such as minimum wage, for example, which affects your hourly rate for new hires.
- Brush up on overtime basics. If the numbers aren’t strong enough to support hiring a handful of seasonal workers for a couple of months, you’ll need to plan to designate funds for overtime, which will vary based on your scheduling demands. Under the Fair Labor Standards Act (FLSA), your hourly employees are entitled to overtime pay at one and one-half times the regular rate for any hours over 40 in a workweek. When it comes to overtime, you must keep a close eye on employee scheduling and set clear boundaries on what is considered authorized overtime. Working more than 40 hours should always be discussed beforehand and/or agreed upon by the supervisor and manager. That being said, asking employees to put in extra work or “work off the clock” without paying them is a violation of federal law. Remember, too, whether an employee is part-time or full-time, if he or she works over 40 hours in any given workweek, he or she is eligible for overtime under the FLSA. The best way to prove actual hours of work is to keep thorough time records (TrackSmart is an ideal online tool for tracking time) and have all employees review and “sign off” on their total hours at the end of each workweek. As a manager, never accept time records that are inaccurate, incomplete, illegible or lacking a signature.
- Consider the emotional cost of excessive hours. It might make more financial sense to extend overtime to your current employees, but be aware that the extra work hours can lead to burnout. Even superstar employees may cut corners or fall short if they’re overwhelmed or stressed out. When that happens, mistakes at the cash register or bad customer experiences can occur. Watch the work environment in your store and make adjustments with any employees who appear to be struggling with extra demands.
- Spend your payroll dollars where it matters most. In the end, it may not be a one or the other decision. Instead, it may be best for your business to hire a couple of seasonal workers to take on the extra responsibilities, as well as extend the option for overtime to your highest-performing employees or those who express an interest in additional hours.