A Business Case for Stable Hours?
A new study has provided some tentative, empirical evidence of something that many retail and fast food workers on the front lines already believe intuitively. I'll come back to the study, but I want to set some context first. In many stores, it's essentially a part of the acclimation process for new employees: the first time they find themselves in the middle of a crazy rush and wondering to themselves (or out loud), "Why don't we have more people working right now?"
These new employees will of course feel viscerally the effects of understaffing. They'll feel the glare of a customer growing more impatient by the minute. They'll feel the pressure of more tenured co-workers trying to bear with them as they learn. They'll feel the strain of extreme multi-tasking. And they will follow the simple and unassailable logical line: "I bet if we had a few more people working that rush, we could have not only made things less stressful on all of us, but we could have made more money and served customers better." If they bring this idea to management, it will have to be explained to them why things just aren't that simple.
In some ways, things really aren't that simple. On the surface, labor is the most costly controllable expense, and it can't just be pulled out of thin air in the precise moments that it's needed. Customer traffic can be unpredictable. Let's say on average, an employer will schedule a part-time worker a minimum of four hours per shift. It's tough for a manager to pull the trigger on scheduling that four hours if they know it may or may not be needed, or they might only need an hour of it. So they may say, "We'll just grin and bear it if it gets busy because I can't afford to waste three hours of payroll just to have the one that I need."
This is the view from the vantage point of business acumen, in which labor is just like any other expense, like inventory or operating costs. You have to maximize efficiency and always consider return on investment. But of course, labor isn't like any other expense. It comes with the vantage point of humanity as well. Even though for productivity's sake it might be best to schedule someone for just one hour, you just can't do that. Schedules aren't simply tools of labor efficiency; they are lives and livelihoods. And businesses of all kinds have long been tasked with the difficult responsibility to not simply make the most efficient use of human labor, but to provide human beings with a job they can rely on for sustainable income and a livelihood.
It's arguable that businesses don't necessarily have this responsibility as a fundamental aspect of their being, but that they have taken it on voluntarily in the quest to compete for talent. Indeed, retail and fast food chains have done as much as any other industry to distance themselves from that notion of the employer-employee relationship. Ostensibly, many of them, especially the large, corporate chains, will boast of benefits, "competitive" wages, and advancement opportunities. But in regard to practices around wages, schedules, and reliable hours, they are often prone to fix their collective gaze on the business efficiency aspect of labor and keep the livelihood aspect blurred in the background. At a philosophical level, much of the jurisprudence around labor issues represent an ongoing struggle between these two aspects of business: the business's right to profitable use of labor vs. the employee's right to humane treatment and just compensation.
So back to the study, the summary on its website states:
Additionally, there was some narrowness in the time scope of the study, which was conducted over a 10-month period. I would love to see a similar study extended to at least 18 months, to see the results in year-over-year same store sales, which is the real bread and butter metric in this sort of industry.
The New York Times offers some analysis here.
If more studies demonstrate similar results, it could go a long way towards reconciling the efficiency vs. livelihood aspects inherent in labor management. Is it too good to be true that there is a real business case for providing a living wage and stable hours to your employees?
These new employees will of course feel viscerally the effects of understaffing. They'll feel the glare of a customer growing more impatient by the minute. They'll feel the pressure of more tenured co-workers trying to bear with them as they learn. They'll feel the strain of extreme multi-tasking. And they will follow the simple and unassailable logical line: "I bet if we had a few more people working that rush, we could have not only made things less stressful on all of us, but we could have made more money and served customers better." If they bring this idea to management, it will have to be explained to them why things just aren't that simple.
In some ways, things really aren't that simple. On the surface, labor is the most costly controllable expense, and it can't just be pulled out of thin air in the precise moments that it's needed. Customer traffic can be unpredictable. Let's say on average, an employer will schedule a part-time worker a minimum of four hours per shift. It's tough for a manager to pull the trigger on scheduling that four hours if they know it may or may not be needed, or they might only need an hour of it. So they may say, "We'll just grin and bear it if it gets busy because I can't afford to waste three hours of payroll just to have the one that I need."
This is the view from the vantage point of business acumen, in which labor is just like any other expense, like inventory or operating costs. You have to maximize efficiency and always consider return on investment. But of course, labor isn't like any other expense. It comes with the vantage point of humanity as well. Even though for productivity's sake it might be best to schedule someone for just one hour, you just can't do that. Schedules aren't simply tools of labor efficiency; they are lives and livelihoods. And businesses of all kinds have long been tasked with the difficult responsibility to not simply make the most efficient use of human labor, but to provide human beings with a job they can rely on for sustainable income and a livelihood.
It's arguable that businesses don't necessarily have this responsibility as a fundamental aspect of their being, but that they have taken it on voluntarily in the quest to compete for talent. Indeed, retail and fast food chains have done as much as any other industry to distance themselves from that notion of the employer-employee relationship. Ostensibly, many of them, especially the large, corporate chains, will boast of benefits, "competitive" wages, and advancement opportunities. But in regard to practices around wages, schedules, and reliable hours, they are often prone to fix their collective gaze on the business efficiency aspect of labor and keep the livelihood aspect blurred in the background. At a philosophical level, much of the jurisprudence around labor issues represent an ongoing struggle between these two aspects of business: the business's right to profitable use of labor vs. the employee's right to humane treatment and just compensation.
So back to the study, the summary on its website states:
In the first randomized controlled experiment of a multi-component intervention designed to shift schedules in hourly retail jobs toward greater stability, the Stable Scheduling Study found that increasing the stability of work schedules is possible and even profitable in today’s competitive retail environment.What gives me pause about this is that the authors here make it clear that they designed the experiment to prove an already-decided-upon conclusion. That's not a good starting point for any study that seeks to uncover objective truth. But the data is thought-provoking nonetheless, and will hopefully lead to more and better studies. The primary reason I feel that the data is worth discussing is that the researchers would have had minimal control or influence on the results, which found that when managers at Gap stores were tasked with specific objectives for creating more stable schedules, labor productivity increased by an average of 5% and sales increased by an average of 7%.
Additionally, there was some narrowness in the time scope of the study, which was conducted over a 10-month period. I would love to see a similar study extended to at least 18 months, to see the results in year-over-year same store sales, which is the real bread and butter metric in this sort of industry.
The New York Times offers some analysis here.
If more studies demonstrate similar results, it could go a long way towards reconciling the efficiency vs. livelihood aspects inherent in labor management. Is it too good to be true that there is a real business case for providing a living wage and stable hours to your employees?
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