![](http://www.d-ddaily.com/people/AdamSmithionpad.jpg)
Reducing Labor Expense, an
Ally to Loss Prevention Initiatives
Submitted by Adam Smith, CFE, CFI
Senior Regional
Asset Protection Manager
Winn Dixie Stores
At the conference room
table, everyone has an agenda. Resources are limited, and
everyone needs some portion of them to affect change in
their area of the business. In most cases, initiatives with
the most significant financial impact are awarded these
resources. Most organizations are focused on growing sales
and cutting expenses to an extent far greater than the
impact of inventory shrinkage.
However, if we take a closer look, we may be ignoring an
ally. Proactive Loss Prevention departments routinely
examine and refine controls and processes. These activities
may have a direct impact on the labor required to
perform
them. In many cases, there may be labor savings. If so, it
may make sense to include them in a formal presentation.
Retail salaries can exceed 10% of sales and account for one
of the leading expenses for a retail store. When salaries
become part of the conversation, they can add a significant
financial impact to an inventory shrinkage initiative, which
is a much smaller expense at 1.5% of sales (NRF average).
The same could apply to retail utilities or any other
positive impact to the business. On the other hand, there
may be negative impacts which would reduce savings from an
initiative. Nevertheless, Loss Prevention initiatives that
positively impact multiple areas of the business may warrant
more attention from the organization. |