Andrew Burton
May 2024
STRATEGIES FOR NAVIGATING THE LIVING WAGE SURGE
On 1 April 2024, the National Living Wage increased by more than £1 for the first time. It doesn’t take a genius to know that garden centres are heavily supported by living wage staff, and this leaves garden centre owners and managers with significant challenges to cover their wage increases, especially at a time when the economic aspects and overhead increases are also high on the agenda.
I’ve been working with a number of businesses over the past year to take steps in advance of this, and whilst different businesses have different strategies how to tackle this impact in costs, one thing is for sure, everyone is feeling this affect and taking action in one way or other.
I was thinking about the actions some garden centres and other rural businesses are taking to counteract the impact being created by the living wage, and amongst them were strategies that supported processes and productivity, revisiting turnover opportunities and working with the team to maximise profit.
DEVELOPING STAFF ACCOUNTABILITY
It’s easy to point out that improving productivity of the team can help lower costs or improve profit, and it’s an area that many garden centres work on continuously to improve. However, not all garden centres do this and it is an opportunity for many businesses to look at their existing team, work out who does what and why they do what they do.
Team development can be focused on the whole team, using a number of development techniques that may include annual appraisals, focused training, restructuring of the business, or simply by giving more responsibility to the team.
THE STRONGER THE TEAM’S CAPABILITY, THE BETTER THE PERFORMANCE
We know that training is a key aspect to help develop people, and it something that should have a really positive impact on the team and induvial, ultimately helping the business. However, successful process management also depends on a teamwide capability and understanding of everyone’s roles and responsibilities. There are lots of different methods to identify how a team can get better, and one way to look at the team is through a RACI Matrix, which is a document that clarifies which individuals are responsible for what job. It helps to identify the roles that each will play throughout the project. This document can be adapted at the correct level for the business needs, but essentially it is a working document that identifies what individuals could be responsible for and gives clarity to the whole team who is accountable for what.
Identiying and reviewing this within your team can really help with understanding the need for multi-skilling and what people should be doing.
TEAM ENGAGEMENT IN HELPING LOWER COSTS
Employee engagement is an essential component of any successful business, and it can significantly impact productivity, staff retention, and overall performance. However, it can be challenging for some businesses to know how to foster this employee engagement effectively.
Staff who are not involved in the business objectives are often demotivated and unenthusiastic and may not be invested in their job, which can lead to low productivity, poor performance, and higher staff turnover rates.
On the flip side, an engaged team are usually really caring and passionate about their job, and they feel valued. This culture is often more likely to see the team go the extra mile, react well to additional responsibilities, and work really well with their colleagues and as a team!
There are usually so many hidden talents in a team and group of individuals, and working as a team will help to use these. It is an age-old adage that leading a team well will more than likely equate to success, but it is imperative in my view that engaging the team through strong leadership could well make a step change in how well the garden centre might operate.
STAFF SCHEDULING
It goes without saying that reviewing staff scheduling has been high on the agenda for many garden centres this past year. There are a lot of businesses who schedule staff ‘how they always have’. However, by revisiting your staff schedules and looking in depth at when people should be in and for what job, this can make a real difference in payroll costs. Of course, there is a fine balance between reducing hours versus achieving tasks and motivation of the team, but anyone who has not completed this exercise recently may well be advised to do so.
This review should also be more than looking at hours by job; it may also create a review of processes, including trolleys collection, food production, deliveries, replenishment and admin – including identifying anything that might be outsourced or automated.
BENCHMARKING AND LAYOUT
Operationally, I work the team at Pleydell Smithyman alongside a number of garden centres to review their businesses to maximise their turnover and profit potential. In every business there looks to be some sort of potential to improve profit.
Some low hanging fruit, and others big step changes that could make a significant difference in their turnover.
As an example, a few months ago I worked with a garden centre who wanted to introduce a new food offer by using a newly built building, but on review of the garden centre turnover and local competition it was clear that food wasn’t the best way to develop. However, seasonal space was minimal and growth in furniture and Christmas was something that would likely impact the turnover potential significantly. So, we introduced a smaller food retail offer in the existing seasonal space, which was in a high impulse location, and moved the seasonal department to a space nearly twice its existing size in a location more suited to this product type. This was the right move for that business, but essentially, I wonder how many garden centres have benchmarked themselves, looked at their competition and understood what was ‘best placed for what location and space’ and also to see if processes could be improved by using space better.
Anyone who hasn’t done this since covid hit us may really want to consider it, because there has been lots to consider in recent years and doing something that would impact on profit positively is a clear way to help focus on paying higher costs.
It’s not all doom and gloom
There are a lot more areas for businesses to look at when looking at their costs vs profit, and what journey each individual business goes on depends on ‘where they are in their journey already.’ I look back at challenging times in the past, and our garden centre industry is one of flexibility and maturity and I know this is another hurdle we will step over, but it may be one that we need to do together using all the resources we can across all areas of the industry.