Get More From Every Labor Dollar in 2025

Labor budgets are under pressure. How will you compete? 

In today’s Specialty Retail landscape, every labor dollar counts. Foot traffic is rebounding, consumer expectations are soaring, and the labor market remains tight. Yet, many Retailers are still struggling to optimize labor budgets, maximize productivity, and schedule effectively, leaving revenue on the table. 

Specialty Retailers thrive on exceptional in-store experiences, but poor labor allocation disrupts this, leading to wasted hours and missed sales opportunities. The data speaks for itself: 

– 71% of retailers report being understaffed at least 1–3 days per week (Retail Dive, 2024)

– Retail labor costs are rising, with 23 states set to increase minimum wage in 2025 (NRF, 2024). 

– Sales per labor hour is now a key metric for productivity gains in retail (NRF, 2024). 

– The U.S. economy saw a 2.8% GDP growth in Q3 2024, fueled by strong consumer spending (NRF, 2024). 

What is the cost of falling behind?

Retailers, Specialty Retailers in particular, shouldn’t consider labor simply as an expense.  Labor is a Specialty Retailers most valuable investment.  Yet, mismanaged budgets, inefficient scheduling, and outdated workforce strategies such as using a blanket approach to labor allocation across all stores, are holding Retailers back.  

The costs are clear: missed sales, declining morale, and poor customer experience.  

So, what’s next? The Retail workforce landscape is shifting and we’ve outlined five key trends that will define success for Specialty Retailers in 2025. 

Trend 1 - Labor budgets are under more scrutiny than ever

Rising costs and tighter margins mean smarter spending is necessary.  We seem to be hearing the same thing again and again: sales targets are higher while labor budgets are flat.  How do we do more with less?  Specialty Retailers are balancing rising wages, unpredictable traffic patterns, and evolving compliance laws, all while trying to maintain profitability.  

Consider this: 

– Retailers report that their store associates are juggling too many tasks, leading to lower productivity and reduced conversion rates. 

– Store visits often reveal labor inefficiencies such as peak hours being understaffed or too many associates scheduled during slow periods  

– Retailers who fail to optimize their labor scheduling often see measurable revenue loss as misaligned labor allocation leads to missed sales opportunities or overspend on labor dollars. 

This is where real-time data will give you a competitive advantage.  Understanding your customer demand for each unique store, means you can align your labor with laser-like precision. Build your schedules to reflect these real-time sales patterns, not outdated assumptions.  Ensuring you have the right people on the floor at the right time gives you the ability to do more with less while maintaining strong customer service and operational efficiency.  

Trend 2: Sales Per Labor Hour is the new ‘Gold Standard’

Gone are the days of just tracking foot traffic and conversion rates. The new industry benchmark is Sales Per Labor Hour (SPLH), a metric that measures how efficiently stores generate revenue relative to labor investment. 

 

Retailers who actively manage SPLH see significant improvements in profitability.  The impact is clear: 

– Stores that fine-tune their labor allocation see a measurable increase in profitability simply by ensuring the right staffing levels during peak hours. 

– We know already that a small portion of hours accounts for the majority of sales, yet many Retailers still spread their labor across all hours.  This leads to inefficiencies and lost revenue. 

 

Optimizing SPLH is not just about having enough staff but having them doing the right tasks at the right time (sell and non-sell tasks) to maximize revenue and customer satisfaction. 

 

How leading Retailers are optimizing SPLH. 

– Identify peak sales windows with precision.  The best Retailers don’t guess when their stores will be busy – they use data to tell them. StoreForce’s intelligent workforce analytics provide real-time visibility into customer traffic patterns to identify exactly when each of your stores will be at their busiest.   Strategically position your labor when it matters the most.  

– Store associates need to be available for customers when it counts. The most efficient Retailers separate selling tasks from non-selling tasks, ensuring back-of-house work happens during off-peak hours so associates can focus on customer service when stores are at their business. 

– Regularly audit your SPLH performance to fine-tune your labor. StoreForce continually analyzes labor performance allowing Retailers to make data-backed decisions and adjustments to improve productivity and profitability. 

Retailers need to embrace SPLH as a guiding labor metric to drive profitability and operational efficiency.  

Trend 3: The Science behind peak hours

The best Retailers don’t just schedule shifts, they strategically deploy labor to match consumer demand. Yet, too many still rely on outdated scheduling methods that spread labor evenly across the day. The result? Overstaffing during slow periods and understaffing during peak hours. 

Retailers who get peak scheduling right see a measurable lift in sales and profitability.   Studies indicate that 85%* of Retailers say labor misallocation is their #1 workforce challenge. At StoreForce, we analyzed 4,500 stores over 13 weeks and found that Retailers who schedule their peak hours to achieve 90% coverage saw a lift of 4-6%. 

*Deloitte

The 50/20 Rule: 

50% of your sales happen in 20 hours.  If you’re not maximizing those 20 hours you’re losing revenue.   

When you use real-time sales and traffic data to build your schedules you can ensure that your 20 peak hours achieve 90% coverage.  Don’t waste your dollars when you don’t need to.  And use them wisely when you know your stores are at their busiest.   Cross train employees so that they are productively working back-of-house when your stores are quiet. With StoreForce you can build your schedules to ensure that tasks are being performed when customers are not in your stores.  

Trend 4: Compliance is non-negotiable

Retail labor laws are becoming more complex and more strictly enforced. Across North America and EMEA, governments are introducing predictive scheduling laws, mandating advance notice for shift changes, and increasing penalties for non-compliance. Retailers that fail to adapt face significant financial and operational risks. 

 

In the past year, we’ve seen: 

– Retailers hit with hefty fines for violating labor laws related to fair scheduling and overtime. 

– New regulations requiring greater transparency in scheduling, often mandating 14-day advance notice for shift changes. 

– A rise in Retailers adopting compliance tracking technology to avoid penalties and ensure labor law adherence. 

For Retailers, compliance isn’t just about avoiding fines, it’s about protecting brand reputation and employee trust. Frequent last-minute schedule changes can frustrate employees, leading to higher turnover and lower engagement. Ensuring compliance can actually improve workforce stability while reducing legal risks. 

How Retailers are staying ahead

– Automating compliance tracking. Leading Retailers are using workforce management tools to ensure schedules align with labor laws—before violations occur. 

– Minimizing last-minute schedule changes. Predictive scheduling strategies help Retailers reduce unexpected shift modifications, improving both compliance and employee satisfaction. 

– Aligning scheduling policies with regulatory standards. Smart Retailers aren’t just reacting to new laws, they’re proactively adjusting their workforce strategies to meet evolving requirements. 

Regulations will only continue to evolve, and Retailers that take a proactive, technology-driven approach to compliance will be the ones that thrive. 

Take Control of Your Labor Budget Now

Retail success in 2025 depends on smarter workforce management. Don’t let inefficient scheduling and labor strategies cost you revenue and compliance risks.  StoreForce offers real-time visibility into labor metrics every 30 minutes allowing you to measure your store performance in real-time. Book a meeting with us today.