It’s been framed as a battle between the bottom line for retailers and quality of life for workers.
At issue are so called on-call work shifts, which require employees to call in just hours before their scheduled start times to confirm whether they need to show up.
On-call shifts help employers optimize their staffing and prevent having too few or too many employees on the clock at any given time. But employees maintain the practice leaves them in perpetual states of uncertainty, and creates endless challenges about child care and other aspects of their lives.
Understanding the Issue
Many retailers have moved to adaptable shift models because it makes good fiscal sense, said Neil Trautwein, a vice president for the National Retail Federation (NRF), an industry trade group.
It's expensive and inefficient when retail shifts are over or understaffed, he noted. Getting it right helps retailers of all sizes keeping costs down and effectively engage customers.
Labor costs are the single biggest cost for retailers. For more than 2 million plus service companies in the United States, workforce costs account for 20 to 70 percent of overall costs, according to officials at WorkJam, a company that recently created an Employee Relationship Management solution.
Managing the workforce is a priority for retailers, who are increasingly relying on new tools and technologies to track and respond to customer trends.
But on-calling staffing often requires employees to put their lives on hold and deal with the uncertainty of fluctuating paychecks.
In some cases employees have been sent home after showing up at work, according to the Society for Human Resource Management. Employee complaints have drawn the attention of government regulators, including New York State Attorney General Eric Schneiderman.
Schneiderman last month asked 13 national retailers, including Gap Inc, Target Corp and JC Penney Co., to provide his office with information about their scheduling practices.He said on-call systems leave "too little time to make arrangements for family needs, let alone to find an alternative source of income to compensate for the lost pay" on days the employees are not called in to work."
Schneiderman said the practice might violate the law in New York, where employers are subject to a rule that says employees who report for a scheduled shift on any day have to be paid for at least four hours at the basic minimum hourly wage.
Far Ranging Practice
Some 17 percent of US workers — 26 million employees — are affected by on-call shifts, according to WorkJam officials. “This is both a business and a social issue and will also increasingly be a legal issue as local governments pass new legislation to protect hourly workers from unpredictable scheduling,” said Steven Kramer, CEO of WorkJam.
However, despite the growing interest from regulators, industry groups like the NRF claim it’s premature for politicians to step in because these scheduling models are still evolving.
Some retailers, including Starbucks and Walmart, have already made changes to keep their employees happy, Trautwein said, adding, “I see a lot of change being brought by good employee relations and I see a lot of change coming from some of the publicity surrounding this issue.”
He said regulators and lawmakers who want to regulate retail staffing practices face an uphill battle. No two retailers are the same, he explained, and a one-size-fits-all approach could be problematic. Each retailer handles staffing differently because each business is unique.
And then there is the matter of personal choice, he said. An hourly job that is subject to uncertain hours might not be right for everybody out there, but could work well for some. “It’s part of the decision you make as you evaluate a prospective employer. We can’t, for lack of a better term, bubble wrap every job in the economy. Some jobs are more challenging than others. We really need to leave it up to the employee to choose.”
Balancing the Scales
WorkJam's Kramer said it’s unlikely that this issue will be going away any time soon. This means retailers will need to adapt their practices based on potential legislation and employee preferences.
Ever the optimist, Trautwein said retailers and employees can often hash out strategies that are beneficial to both — and still allows retailers to keep a close eye on staffing. “You can’t have 10 employees where you might only need four,” he said.
But some retailers are moving to meet employees half way, trying to balance their needs with business demands. After all, retailers don’t want to alienate employees because it's always a challenge to find top talent, said Trautwein. “Some of the better practices you see out there are very much a two-way relationship between the employer and the employee."
One such strategy might involve the retailer sending out a list of available hours and letting the employee select for himself.
Technology to the Rescue?
Trautwein noted that "technology offers a great deal of promise in buffering this problem as it evolves.” For example, WorkJam recently rolled out a cloud-based mobile solution, which it claims may help employers and employees find the balance they're looking for.
The platform allows workers to not only find jobs based on their availability, but once they are hired, see the schedule up front and choose their own time slots. That could make it possible to know when they will be working farther in advance, as well as make it easier to switch shifts with other workers in a pinch.
The system also tracks those who step up to help out and take on extra shifts, which makes it easier for employers to see and recognize their efforts, among other features, Kramer added.
“Businesses benefit by lowering recruitment costs, improving attrition rates, optimizing labor in relation to demand signals, and improving the customer experience with happier, more engaged employees. Hourly workers can control their work-life balance, maximize their earnings, develop skills, and advance their economic well-being,” said Joshua Ostrega, COO of WorkJam.
While it remains to be seen whether technology can truly bridge the divide between retailers and workers, one thing seems clear: Given the current political environment, retailers who are using on-call scheduling models would be wise to take the opportunity to review their practices to ensure that they are doing their best to find mutually beneficial solutions.