Do business owners really gain a financial advantage by avoiding unnecessary labor costs, or do they lose money with high turnover rates? Just In Time scheduling, a common scheduling practice used by retailers and restaurateurs is now facing legal criticism. Local business owners may need to rethink their shift planning practices. Here are facts from both sides for you to consider.
On-call shifts require workers to contact their employer an hour or two before a scheduled shift to determine whether they will actually be required to report to work that day. While this form of shift planning helps managers respond to real-time fluctuations in customer traffic, critics note the uncertainty of these schedules, taking an unfair toll on employees.
Major companies have already faced the heat for using on-call shifts. When pressed with a potential class-action suit, the retailer Victoria’s Secret opted to end on-call scheduling, according to Consumerist. The lawsuit takes on the question of whether employees should be paid for a “report to work” shift even if it is cancelled, because they are required to be available and ready for work, as the Society for Human Resource Management reported.
This can create chaos for employees. As Ray Mitchell, who has worked an on-call schedule, said in Buzzfeed, the practice “held you hostage for what you could do each day.” The increased scrutiny of the practice provides an interesting look at what happens when sophisticated shift planning software collides with employees’ needs for stable scheduling.
But major retailers are not the only employers affected by the potential Victoria’s Secret lawsuit. Plenty of local businesses use on-call scheduling in an effort to reduce costs and adapt to the sometimes-unpredictable changes in customer traffic. In many ways this approach makes sense for managers — it may feel like a waste to pay for your entire waitstaff to stand around when a sudden thunderstorm drives all of your customers away.
According to the Schedules That Work Act, however, it will require employers to provide “three weeks or more advance notice of schedules,” and create fair and predictable shifts for all employees. As managers scramble to meet these new requirements, could free shift scheduling software be the tool that eases this transition?
On-Call Practices: Pros and Cons
Local businesses may use on-call practices as a smart cost-cutting measure. Technology has made predictions about customer traffic more sophisticated than ever. As noted in the Wall Street Journal, restaurants and retailers can use forecasting software to respond to fluctuations in the number of consumers by tracking real-time sales and even traffic conditions.
From a business perspective, it’s a great way to help an organization run a lean staff while maintaining the ability to respond quickly to fluctuations in demand. This prevents revenue loss from paying several employees to staff an empty restaurant, or having too few servers on hand to meet the demands of an unexpected crowd. This software can help local businesses tailor their staff to meet current customer crowds.
However, this shift tracking software may not work as well for the benefit of employees who are on call. As explained in The Atlantic, this form of last-minute scheduling makes it difficult for employees to properly arrange work transportation, set up child care needs, and pursue other jobs or educational opportunities. Having to call in just an hour or two prior to a scheduled shift means some employees must scramble to fight traffic and arrive on time. In addition, this practice can be problematic to the employee’s ability to budget personal finances.
As explained by Buzzfeed, if an employee is scheduled to work 30 hours in a week but is only required to report for 10 of those hours, then they are left with no practical way to budget their time or money. This kind of uncertainty could quickly lead to a dispirited workforce. In general, “just in time” practices are great for the automation of some industries, but in this instance, it fails to take the human element into account. And this oversight could wind up costing businesses in the end.
It looks like this form of shift management may be on the way out, as many major employers have already done away with on-call scheduling. As reported by Time, companies such as Starbucks, Abercrombie & Fitch, and Gap now give employees more advanced notice of their work shifts. And the looming threat of lawsuits or government mandates may not be the only reason to forego on-call scheduling.
It also appears that, at least for some organizations, the benefits of on-call scheduling were outweighed by the costs of managing (and losing) stressed-out employees. A high turnover rate is almost always costly. In fact, maintaining a happy work force with set schedules may reduce turnover and ultimately save more money than on-call practices. After all, there are a whole host of factors that affect the bottom line, so what appears to cut costs on a day-to-day basis could very well hamper revenue in the long term.
Shift Planning Solutions
So what steps can you take to create workable schedules while staying within a reasonable budget? Fortunately, there are many alternatives available, and using a free shift scheduling software such as Homebase is one such option.
Get started with your new, risk free Homebase account here.
Homebase has a labor forecast tool which can help local business owners build informed schedules to improve labor costs and meet service demands. Both you and your employees have access to the schedules, so it is easy to manage time off, availability, and other real-life concerns. You can strategically schedule workers while providing employees with their shift information well in advance.
Overall, shift scheduling appears to be moving away from report-to-work shifts in favor of more stable — but strategically advantageous — scheduling. You can use shift planning calendars and apps to identify fluctuations in weekly and monthly customer traffic, making sure all your roles are covered. And employees can maintain some autonomy over their schedule and personal finance budget. With the new breed of shift tracking software and tools, business owners and employees both benefit from advantageous schedules, so everyone wins.