Is Unstable Shift Scheduling Hurting Your Sales?

Few things are predictable in business. Shop owners and proprietors can’t be sure whether a shipment of goods will arrive on time before a big sale, whether revenues will meet the projected goal by year’s end, or if employees will be available to work on a moment’s notice due to a last-minute scheduling change. For large and small enterprises, the last scenario – irregular or unstable shift scheduling – can be a major cause of anxiety for both managers and workers.

As businesses extend their hours to meet market demands and remain agile during economic shifts, many employ workers as needed, especially small companies on tight budgets with limited staff. Retailers and restaurants, for example, can have multiple schedules, including evening, night, overnight (although rarely), split, rotating and on-call shifts.

The negative impact of irregular schedules on workers, especially hourly wage earners, is well-documented. But business owners or managers charged with setting work hours might not know how irregular scheduling can also hurt sales and productivity. A look into the consequences of irregular work hours and their impact on sales will help explain why stabilizing work schedules is in a business’s best interest.

Shift scheduling practices

About 17 percent of the U.S. workforce is on an irregular work shift. According to the Economic Policy Institute (EPI), recent statistics from the General Social Survey (GSS) showed how employers are using various shift scheduling:

• While 6 percent of hourly workers and 8 percent of salaried workers are on unstable or on-call shifts, 30 percent of workers who fall in some other pay category are on one or the other of these two shifts.
• Based on income, workers earning less than $22,500 annually are more likely to be on irregular shifts than those in higher income brackets.
• Based on occupation, an estimated 15 percent of people in sales and related jobs are on irregular or on-call schedules.
• Based on industry, irregular scheduling is most common in retail trade, business/repair services, agriculture, finance/insurance/real estate, personal services, transportation communications, and entertainment/recreation. Business/repair services, finance/insurance/real estate, and personal services are frequently small businesses.
• Nearly 10 percent of workers overall have “variable hours,” that is, no typical workweek schedule, according to Current Population Survey data. Variable hours are less common among married workers, men, union members, government employees, whites and people at higher education levels.

The fallout from irregular scheduling

The economy is making a moderate, but steady comeback from the Great Recession of 2007. Unemployment is at historically low levels – hovering around 4% — and projected to dip even lower by 2019. In this tight labor market, companies are struggling to fill vacancies. While the construction, transportation and technology industries have gained the most jobs, retail, where unstable shifts are the norm, still attracts a sizable portion of the U.S. workforce, currently about 10%.

Retail jobs are often temporary stops for many workers, some of whom are between jobs, have limited skills, are pursuing degrees, want part-time employment or need extra income. But just as workers apply for and accept retail jobs for a variety of reasons, they also leave retailers for myriad reasons, among them irregular work schedules.

More data from the General Social Survey (GSS) demonstrate the hardships irregular schedules can afflict on workers:

• Irregular shift work frequently requires workers to put in long workweek hours.
• Workers, especially those with on-call schedules, are frequently unable to plan for or meet personal demands with regularity.
• Work-family conflicts plague 26% of workers on irregular or on-call shifts and 19 percent of those on rotating or split shifts, compared with less than 11% for workers on regular workweek schedules.
• Rotating shifts often aggravate work-family conflicts, but not irregular, on-call or split-shift schedules.
• Hourly workers have more stress from working irregular shifts than salaried workers. The stress can lead to chronic physical and behavioral health problems.
• Mandatory overtime, which often comes with irregular schedules, contributes to both work-life conflict and work-related stress.
• Part-time, on-call workers can go weeks without work assignments.

Boosts in sales and productivity

An interdisciplinary team of researchers found that setting stable work schedules is not only possible in the volatile retail business, but it also increases both productivity and sales. In the Stable Scheduling Study, the researchers worked with upscale retailer The Gap, Inc. in a two-part pilot program to test stable scheduling outcomes. The initial, or pretest, phase included three stores in the San Francisco area. Each store was instructed to:

1. Complete and post schedules two weeks in advance.
2. Cease scheduling tentative shifts that might be canceled within a few hours of a shift’s starting time.

Part two of the test was the full pilot program, which was expanded to include a total of 28 stores in the Chicago and San Francisco areas. The stores were divided into “treatment” and “control” categories. All 28 stores adopted both practices in the pretest stage. However, researchers added five more instructions for only the “treatment” stores:

• App-driven shift swapping: Allow associates to swap shifts using an app without manager intervention. Managers may add shifts as needed.

• Stabilized shift structure: Make shift start and end times more consistent across weekdays.

• Core team’s scheduling: Make associates’ shift days and times more consistent from week to week.

• Part-time work guarantees: Offer core team members a likely guarantee of at least 20 hours a week.

• Additional sales staffing: Add sales staff at specified times to see if sales increase. The researchers analyzed data from stores to see which ones would likely experience increased sales with extra staff.

The research team found that:

• Median sales increased sharply – by 7% — in the “treatment” stores. (Retailers typically struggle just to reach sales increases of between 1 percent and 2 percent.)
• With sales increases, stores experienced a greater turn on investment (ROI).
• Stable scheduling boosted productivity by 5 percent. “Treatment” stores produced $6.20 more per hour in labor than “control” stores.
• The pilot program generated modest increases in worker input, predictability and consistency, three schedule stability factors.
• A satisfactory number of work hours didn’t increase for most associates, but did for part-time workers.
• Vacillating customer demand isn’t the main source of instability in scheduling. Store managers in large enterprises identified three key sources of headquarter-driven instability:
  • 1) Inaccurate shipment information;
  • 2) Sudden changes in promotions;
  • 3) Corporate leaders’ visits to work sites.   

Public policy remedies

San Francisco, Seattle and New York City passed “predictive scheduling” laws to protect largely retail and food service workers from the hardships of irregular work schedules. Other municipalities are expected to do the same, as these ordinances gain traction across the country.

Seattle’s predictive scheduling program, called “Secure Scheduling,” requires employers to:

1. Give employees work schedules no less than two weeks ahead of time.
2. Avoid changing workers’ schedules without at least seven days’ notice, or else pay employees a one to four-hour penalty.
3. Pay on-call employees for two to four hours if they’re not required to work.

Seattle employers must give workers schedules two weeks in advance, as well as…

1. Schedule shifts 10 hours apart and provide rest periods between shifts so that employees who close a location aren’t opening it the next morning, in a process called “clopening.”
2. Compensate workers for schedule changes after posting, based on a list of different circumstances.

New York City employers must:

1. Post work schedules at least 72 hours before shifts begin.
2. Avoid canceling, changing or adding shifts within 72 hours of a shift’s start time.
3. Provide retail workers with no fewer than 20 hours during each 14-day period.

Employee engagement

Stabilizing work schedules can increase sales, raise productivity and help workers find work-life balance, as the studies above showed. Setting predictable schedules also can be a means of engaging employees, who consistently rate flexible work schedules among their top preferences in workplace perquisites.

In a move to lower turnover and compete for job applicants, some retailers are beginning to let hourly workers decide how much time they want to work and on what shifts. But according to the International Social Survey Program, 45 percent of the workers polled said their employer decides their work schedule; only 15 percent said they felt they were “free to decide” their own schedules. The 40 percent remaining said they think they have some say in setting their schedules.

The GSS report also concluded that giving workers more control over their schedules, including start and end times and time off, can reduce work-family conflict. Combine this advantage with higher sales, productivity and ROI, and the benefits of stabilizing irregular work schedules can be a best business practice for any size company. And since industries with the highest number of irregular schedules are concentrated in smaller enterprises, small business owners and their employees have the most to gain from stabilizing schedules. To learn more about the art of implementing a truly effective flexible work policy, download our eBook for a step by step guide.