At some level, scheduling workers sounds easy. You figure out how many workers you need at 9:00 and how many you need at 10:00, and start assigning people to shifts. However, it can quickly become quite complicated. Airlines have notoriously difficult crew scheduling problems as they need to worry about FAA rules and union regulations on top of the costs of returning your Chicago-based crew to the Windy City at the end of their shift. Retailing would seem to be simpler than airlines but United doesn’t really vary the number of pilots on a 737 while your local Gap can vary the number of workers on the floor a lot over the week. One thing that is clear though is that firms like flexibility. In a perfect world for the firm, the store manager would be able to adjust her staffing level on the fly. Calling in extra staff when Wednesday afternoon is unexpected busy or sending staff home when things are slow.
Of course, a workers whose hours are uncertain or whose schedule is shifting dramatically from week-to-week may not agree with that definition of perfection. That gets us to an article from Forbes (Why A Supportive Schedule Benefits Your Business, Jan 5).
The key to controlling labor costs, goes the conventional wisdom, is to maintain a tight fit between labor supply and labor demand. To achieve this, waiters in some restaurants are sent home if the ratio of staff to customers exceeds 29% by 3 p.m., provided that ratio seems unlikely to drop below 21% by the end of the day. Store managers must maintain a predetermined ratio between employees’ hours and store sales or traffic. Managers call several times a day, or even hourly, to notify supervisors the ratio they have to achieve. Sounds scientific.
Well, it is precise, but it’s measuring the wrong thing. This kind of “just-in-time scheduling” leaves an important element out of the labor equation: realism.
What’s unrealistic? Schedules change wildly from week to week: 60% of employees in one study reported that their schedules change “a lot” or “a fair amount” from week to week. One sales clerk’s schedule was from 11 a.m. to 5 p.m. one weekday; 4 p.m. to 9 p.m. another, and 10 a.m. to 5 p.m. on Saturday. With her one-hour commute, she needed child care as early as 9 a.m. and as late as 10 p.m.
It goes on to give a number of examples of workers who are, frankly, regularly jerked around. Further, these workers are not exactly investment banking salaries. Week-to-week variability in income matters to many of these people.
But stores do need to worry about labor costs. The problem is that there is always a trade-off. Yes, one can save on wages but that can come back to bite the store in terms of turnover.
“Scheduling is having a huge effect on the bottom line,” notes workforce management consultant Lisa Disselkamp. Half the jobs in a one study had turnover rates over 80%. If a company has to replace 300 employees who earn an average of $20,000 per year, the cost is about $1.8 million.
“That’s a lot of money for which the employer gets absolutely nothing but headaches,” notes Disselkamp. Absenteeism is rampant too. In one department store, 80% of the associates were on probation for absenteeism. To cope, managers typically hire a lot of workers, and give each fewer hours. This means that many have to get second jobs–so each employer is at the mercy of another employer’s unstable schedule.
To put those numbers in perspective, the scheduling decisions managers are making in some cases seems at best second order — creating $100 of headache to save $10 in cost.
In nearly two-thirds of stores studied, 80% or more of the hours stayed the same, week in, week out. Create a stable schedule for these hours and post it a month in advance. Then create a separate process for handling the unstable hours. Researchers found one manager who held off posting the schedule because he was uncertain about three hours–out of 200.
Presumably having greater predictability in hours simplifies employees’ lives and makes a job more desirable even if total compensation does not change.
There are other things an employer can do to help employees and reduce turnover. Target, for example, has hired counselors (Target hires counselors to help employees, Jan 20, Marketplace). They serve as sort of a social worker and are seen as being more appropriate to go to when dealing with personal matters that HR staff.
These aren’t your normal workplace issues. More private, personal stuff, like domestic violence, or teen pregnancy or health issues.
Trivino-Perez: Those things tend to keep them away. They don’t know how to resolve it. They don’t know what other resources they have — home, health, any other subsidy.
And with the recession, more employees are facing financial problems like bankruptcy or foreclosure.
Richard Chaifetz: They’re spending time at work trying to contact banks or credit card companies. Or lawyers. Or they’re just missing work because these things are so overwhelming to them that they can’t even focus on their job.
That’s Richard Chaifetz, founder and CEO of ComPsych, the firm that supplies counselors to Target and other companies.
Chaifetz: They want to target the issue of turnover in the stores and the best way, we felt, to address that was by resources on-site for these people. For financial counseling, emotional counseling, legal counseling.
At least at Target, this has been a successful program. Attendance is up significantly and, the company reports, employees are more productive.