Hardware Retailing

NOV 2017

Hardware Retailing magazine is the pre-eminent how-to management magazine for small business owners and managers in the home improvement retailing industry.

Issue link: http://hardwareretailing.epubxp.com/i/889894

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Page 59 of 78

November 2017 | HARDWARE RETAILING 55 Digging Into Employee Compensation NRHA Presents Insights From 2017 Report E mployee compensation is a major investment for every retail operation, and the topic is loaded with implications for businesses' profit margins, staff retention and competitiveness in hiring. Independent home improvement retailers are working to balance profitability with offering competitive pay rates and, often, the desire but inability to offer benefits, such as health insurance and salary bonuses. Knowing how much similar businesses are paying their employees in specific positions and what benefits they provide can help you gauge if you're spending too much or can find new ways to reward outstanding work. The North American Retail Hardware Association (NRHA) conducted research for its 2017 Employee Compensation Report in an effort to provide that insight. One challenge independent retailers face widely is the growing cost of payroll, which is the largest operating cost for independent home improvement stores. About 65 percent of the participants in the NRHA study expect their payroll expenses to be higher in 2018 than in 2017. That expectation is in line with a trend of payroll increasing as a percentage of sales within the past few years, even though employee counts are generally decreasing, according to data retailers report for NRHA's Cost of Doing Business Study. The growing cost of payroll impacts what businesses can afford to pay in benefits, such as 401(k) matches or noncommission bonuses. However, retailers are still finding creative ways to incentivize good work, and you, too, may be able to come up with plans to do the same. For example, some study participants offer bonuses based on average ticket sizes, gross margin increases, cost control and customer counts, rather than individual performance or profits alone. The following pages detail some of the findings of NRHA's 2017 Employee Compensation Report, including average pay for specific jobs. The entire study will be presented in full in a report published separately. The data included in this article are broken out by store type and can be used for general guidance on salaries. Retailers should keep in mind that local market conditions, minimum wage laws and the cost of living vary across the country. Variations over time may reflect market conditions, or could be attributed to the fact that the pool of respondents changes for each compensation study NRHA conducts. 2017

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