Amanda J. Phalin: Making businesses work for everyone
By Amanda J. Phalin
Many Gainesvillians have a daily routine: Sit in morning traffic, work, sit in evening traffic. It’s easy to feel frustrated while trapped on one of the few arterial roads in town. But if we stop to think about our everyday grind, we are, in fact, incredibly lucky.
Some only dream of being stuck in traffic. If you work in food service or retail, chances are high that your day is dictated by “on-call scheduling”: You get only a few days’ or even hours’ advance notice before shifts, and they may be canceled last-minute. According to the U.S. Census, almost 20 percent of employees in the metro area work in these sectors.
Businesses say just-in-time scheduling helps reduce costs. But employees bear those costs in the form of irregular paychecks for already low-paying work. Being on call also makes planning child care, medical care, school work and additional jobs difficult.
New York City, Seattle, San Francisco and Oregon have declared the practice abusive, passing laws mandating stable scheduling and requiring businesses to pay workers for canceled shifts.
Given the high percentage of our labor force vulnerable to unstable scheduling and its negative repercussions, should Gainesville and Alachua County pass similar measures?
A study from last month’s Harvard Business Review says, quite possibly. Researchers randomly assigned Gap clothing stores in San Francisco and Chicago to two groups: On-call scheduling as usual, or stable scheduling. In the stable-scheduling group, sales increased 7 percent and productivity jumped 5 percent, translating into almost $3 million in additional revenue.
This seems like an endorsement of fair-scheduling policy, but note a few caveats: First, the stores chose to participate in the experiment, meaning that managers in the study may have already had a preference for stable scheduling. Second, Gap gave most managers in the stable-scheduling group additional staffing hours, on top of their current labor budgets. Finally, workers were able to exchange shifts, on the mobile app Shift Messenger, without manager involvement.
In other words, the study shows that when managers want to provide more stable scheduling, when it doesn’t cost them more to do so, and when employees can change their schedules freely, revenue and performance will rise. This doesn’t seem surprising. Can a government mandate create the same outcome?
San Francisco’s experience suggests no. According to a survey of retailers by the conservative Employment Policies Institute, after the law’s 2015 implementation, about 20 percent of businesses offered fewer part-time positions, and about 33 percent provided less flexibility in schedule changes.
A survey of workers from the Center for Law and Social Policy and Young Workers United, a labor advocacy group, dovetails with these results. More than 33 percent said they want to work additional hours, but responses differ significantly by race: Sixty percent of African-Americans want more hours, compared with only 17 percent of caucasians.
What is happening? In economics, it’s called a “perverse incentive” — a policy that yields the opposite, unintended, result. Under the new laws, businesses pay a penalty for scheduling a worker and then canceling at the last minute. Rather than risk the fine, it appears that managers opt to fill fewer shifts. And, findings indicate that non-white workers are more likely to be excluded from those reduced shift schedules.
Then what can be done? Is there a way to capture the benefits of stable scheduling without the negative, unplanned consequences that regulations can sometimes create?
Looking at the Gap study, the elements for a successful stable-scheduling program seem clear: willing managers, additional money for implementation and employee freedom to set shifts. Instead of imposing a requirement on businesses, local leaders should endeavor to create an environment that encourages positive behavior. In lieu of a Fair Scheduling Law, city and county officials should consider a Fair Scheduling Tax Incentive, as well as grants that provide businesses access to training and mobile scheduling apps, such as Shift Messenger.
The data are clear: Good working conditions are good for business. But managers and employees need the freedom to create systems that work at their individual firms. With the right set of flexible incentives, we can help improve the livelihood of many in our community, allowing more Gainsvillians to create their own daily grinds.
Amanda J. Phalin is a lecturer at the University of Florida’s Warrington College of Business. Luke Newquist assisted with research.