The rise of the part-time workforce

So how is this for effective workforce scheduling (A Part-Time Life, as Hours Shrink and Shift, New York Times, Oct 28):

At the Jamba Juice shop at 53rd Street and Lexington Avenue in Manhattan, along with the juice oranges and whirring blenders is another tool vital to the business: the Weather Channel.

The shop’s managers frequently look at the channel’s Web site and plug the temperature and rain forecast into the software they use to schedule employees.

“Weather has a big effect on our business,” said Nicole Rosser, Jamba’s New York district manager.

If the mercury is going to hit 95 the next day, for instance, the software will suggest scheduling more employees based on the historic increase in store traffic in hot weather. At the 53rd Street store, Ms. Rosser said, that can mean seven employees on the busy 11-to-2 shift, rather than the typical four or five.

Such powerful scheduling software, developed by companies like Dayforce and Kronos over the last decade, has been widely adopted by retail and restaurant chains. The Kronos program that Jamba bought in 2009 breaks down schedules into 15-minute increments. So if the lunchtime rush at a particular shop slows down at 1:45, the software may suggest cutting 15 minutes from the shift of an employee normally scheduled from 9 a.m. to 2 p.m.

This seems like every managers dream: Turn employees into on demand resources and pay for what is needed as opposed to what might be needed. The downside of this, of course, is that it shifts risk to employees who end up with both fewer hours per week and more unpredictable schedules.

“Over the past two decades, many major retailers went from a quotient of 70 to 80 percent full-time to at least 70 percent part-time across the industry,” said Burt P. Flickinger III, managing director of the Strategic Resource Group, a retail consulting firm.

No one has collected detailed data on part-time workers at the nation’s major retailers. However, the Bureau of Labor Statistics has found that the retail and wholesale sector, with a total of 18.6 million jobs, has cut a million full-time jobs since 2006, while adding more than 500,000 part-time jobs. …

The widening use of part-timers has been a bane to many workers, pushing many into poverty and forcing some onto food stamps and Medicaid. And with work schedules that change week to week, workers can find it hard to arrange child care, attend college or hold a second job, according to interviews with more than 40 part-time workers.

At some level, this is another in a stream of articles about how miserable it is work in retail (see, for example, this post). The confluence of a large number of unemployed/underemployed workers following the financial crisis with the decreasing power of unions and the growth of retail chains (who can afford to invest in Jamba Juice like scheduling technology) all means that the balance of power has shifted toward employers. And it seems that they have opted to take a short-term gain.

I say that because I don’t see how a model built around a large number of interchangeable workers can lead to good service and a sustainable advantage. Arguably workers won’t matter if systems dominate. That is the McDonald’s model — a firm long associated with a high rate of employee turnover (although they have at times tried to change the McJob image — see here). Making fries at McDonald’s amount to lowering a basket and pushing a button. Workers can be productive quickly without too much training because the system drives value.

I’m not sure that is true in a lot of retailing. Think apparel. Sure The Gap or Abercrombie  may have their own proprietary systems but outside of the point of sale system frontline workers don’t tough them. A part-time worker isn’t going to be placing orders or asking to have inventory transshipped. So workers don’t need too much training but at the same time there is not much value added in the sales process at these large chains. What’s a worker to do except check to see if they have a blue one in medium? If the sales staff is not providing much value (as opposed to what, say, the Apple Store’s workforce does), why should a customer come into a physical store as opposed to shopping on-line?

So this strikes me as an interesting mix of operations and, for lack of a better word, morality. Operational efficiency favors extreme flexibility. But that comes at the cost of short-changing workers and potentially making life harder for customers (or at least imposing lowest common denominator level of service on them). At the same time, it’s not clear that it pays off in the long-haul for firms.