Retail outlets are more economically successful when their workers’ hours are predictable and stable, according to new research at the Harvard Business Review. In a control test, a team led by University of California Professor Joan C Williams altered working patterns in a series of Gap branches in Chicago and California’s Bay Area. The team’s focus was unstable staffing patterns stemming from the US equivalent of zero-hours contracts.
As a result of an eight-month pre-test that the team conducted on just three stores, the entire US network of Gap premises decided to i) eliminate ‘on-calls’, whereby employees are lined up for shifts that can then be cancelled at any time up to two hours before they are scheduled to begin, and ii) require staff schedules to be posted two weeks in advance.
Following the full test, participating store managers chose to adopt a series of further changes, including: i) giving a core team of associates a ‘soft guarantee’ or 20 or more hours per week; ii) establishing standard start and end times for shifts, and iii) giving more store workers a stable, core schedule, so that their hours were more consistent from one week to the next.
The test outcomes that encouraged the managers to make those changes were that the stores where the hours had been modified to be more consistent experienced average sales growth of 7%, with the collective rise valued at almost $3 million.
The team’s primary target was the retail industry’s use of irregular hours as a cost-cutting exercise – indeed, they write in the HBR: “Practices such as having barebones staff in stores and unstable scheduling (schedules that vary on a day-to-day basis) have flourished in the guise of enabling greater profits for retailers. In study after study for over a decade, operations researchers have found that retailers understaff during peak hours. Increasing staffing, they found, could increase sales and profits.”
However, if we leave the question of cost-cutting aside, can it also be inferred from this research that some industries are less suited to flexible-working arrangements than others, and benefit from more consistent rostering?
The Institute of Leadership & Management head of research, policy and standards Kate Cooper says: “It’s important that flexibility doesn’t become synonymous with total advantage to the employer – as was very much the case with Gap prior to these experiments – which could obscure the mutually beneficial form of flexibility that we at the Institute refer to when we talk about it. Just having people on call and only paying them when you need them is poor working practice – not to mention exploitative. Therefore, it’s not surprising that when Gap decided to improve their working practices and their contract with their employees, productivity improved: the firm was treating those people better.”
Cooper agrees that some industries are able to cope with flexible working more than others, and there are several factors that determine that level of coping. “They include the type of work carried out, the amount of control that’s required over that work, the location in which it’s performed, and the extent to which it involves people working alongside each other. In customer-facing jobs, such as those that underpin Gap, the fact of the matter is that you have to be there. You can’t face customers effectively from a remote location.”
However, she adds: “if we stick to the concept of flexibility being a mutually beneficial arrangement, then it may take the form of part-time hours, staggered shifts, or different starting times. But what people want is something that fits into their lives – and that means the lives of employees, rather than predominantly the convenience of the employer.
“So it’s a consistency issue – but it’s also about security. In addition to the requirement for a mutually advantageous relationship, there’s a strong argument to be made for paying flexible workers higher rates than those awarded to staff with stable contracts, to offset the inherent insecurity of the arrangement. It would also counterbalance the convenience that the employer has to avoid the costs of full employment by having a proportion of staff who are on flexible hours.”
Image of Gap signage courtesy of Heather Shimmin, via Shutterstock
Other resources of interest
- 08 October 2018