(Bloomberg Opinion) -- In recent months, a number of big, bold proposals have been advanced to relieve economic pressure on the poor, including a federal job guarantee, a universal basic income and single-payer health care. But a lot of more modest but still important ideas are being overlooked. One of these is the idea of stable work scheduling.
Over the years, many employers, especially retailers, have moved away from reliable, fixed schedules where workers have the same hours every week. The initial reason they did this was to meet demand — when there are lots of customers in a store, you need lots of workers to serve them, but when the store is almost empty, paying a lot of staff to stand around simply hurts the bottom line.
But variable work schedules have gone well beyond simply matching staffing levels to customer numbers. Companies realized that they could eke out improvements to their bottom lines by keeping low-paid, insecure workers on call at all times, desperately hoping to be given the chance to work. The horror stories abound. Some workers are inexplicably not given hours for an entire week. When others request scheduling changes, they are answered with dramatic cuts in their hours. Still others have on-call scheduling, where they are forced to sit by the phone waiting to see if they’ll be given paid work.
This sort of insecure scheduling, which now applies to about 10 percent of the U.S. workforce, hurts workers in a number of ways. First, being on call constrains a worker’s unpaid hours, preventing them from getting another job, completing various types of chores, managing child care or enjoying many leisure activities. Second, income uncertainty makes it harder for people to plan their consumption and save money. Surveys find that unpredictable schedules are a significant source of stress.
A number of Democratic legislators, including Massachusetts Senator Elizabeth Warren, have been pushing for a fix. Their bill would set minimum weekly hours, require two weeks’ notification of scheduling changes, ban employers from retaliating against workers who request different schedules, and implement a number of other changes. But the effort is sure to see plenty of pushback from retailers, who will claim that the proposed regulations will hurt their profits.
Enter academics. In 2015, an interdisciplinary team of researchers led by University of California, Hastings legal scholar Joan C. Williams conducted experiment with Gap Inc. to see how more regular scheduling would really affect a retailer. Their results demonstrated that if done right, established schedules aren’t just good for workers, but for corporate profits as well.
After a seven-month pilot study at three stores, Gap decided that it would eliminate on-call scheduling and implement two weeks’ notice for changes to working hours at all of its stores. The full experiment, which included 28 stores and ran for nine months, went further. At those stores, workers were given an app that let them swap shifts without manager approval, and allowed managers to post new shifts as the need arose. Core employees were offered a soft guarantee of 20 hours a week. Managers attempted to maximize the consistency of hours for employees, and the stores were paid to add staff at times when demand was predicted to be high — a practice known as targeted additional staffing.
The changes had a number of positive effects — not just for the workers, but for managers and for the company as a whole. The workers who received the soft guarantee of 20 hours a week saw this promise honored, and their extra hours didn’t come at the expense of other employees. All employees saw the consistency of their hours increase. This didn’t hurt sales or productivity — it led to increases. The median store where the experiment was carried out saw a 7 percent increase in sales, and generated an additional $6.20 of revenue per hour per employee. Since this is a very large increase in sales and productivity, and the only cost associated with the program was the modest expense of targeted additional staffing, the researchers estimate that the company’s return on investment was high — in other words, regular schedules almost certainly help the bottom line as well as the top.
Why did these stores make money instead of lose money? Any lost flexibility from consistent scheduling was more than made up for by other factors. One of these was reduced turnover costs — more consistent hours meant that fewer employees quit, reducing the need to spend money hiring and training new people. Also, surveys indicated that morale improved at the stores — happier workers tend to be more productive. Finally, managers simply wasted less time planning schedules, allowing them to do more important work.
This study has several important lessons. First, legal efforts to mandate and/or reward regular work scheduling shouldn't be viewed as helping workers at the expense of employers, but as a way to help both at once. Second, the solution to the problem of irregular scheduling requires a multipronged attack — banning certain practices, using innovative new technologies and changing corporate culture.
In an age of big ideas, regular work scheduling may not seem Earth-shattering, but it’s a low-cost way to make the lives of the U.S.’s precarious service-worker class a lot less painful.
©2018 Bloomberg L.P.