In late summer, with the back-to-school shopping season in full swing, a small group of clothing retailers in Chicago will challenge convention by offering their low-wage, mostly part-time workers a list of perks normally reserved for management: flexible hours, time off when needed, and a locked-in schedule of shifts that allows workers to plan a full month, rather than a few days, in advance.
If researchers overseeing the experiment are correct, higher worker satisfaction at those stores will boost employee morale, retention rates and productivity, pushing labor costs down and revenues up. Meanwhile, those workers will report reduced stress, better physical and mental heath, and stronger relationships with family and friends.
"It's really a win-win," says Susan Lambert, an associate professor at the University of Chicago's School of Social Service Administration, who will compare employee turnover at the Chicago retailers to others in the area with traditional, less family-friendly work policies. "But few firms are willing to make the change. They still view low-level jobs as a cost to be controlled rather than an opportunity to cultivate a workforce."
Lambert is among a handful of researchers around the country exploring one of the most overlooked areas of labor policy: work-life balance at the bottom end of the pay scale.
The kinds of flexible workplace benefits the professional class often take for granted — maternity and sick leave, time off for family emergencies, control over their work schedules, telecommuting — rarely trickle down the pay ladder. Yet, studies show that workers at or near minimum wage are most in need of such benefits. The working poor are more likely to hold down more than one job, have greater health care needs, are more likely to be single parents and caregivers, and report greater difficulty commuting to their jobs.
"We've been talking about work-life balance for a long time, but we haven't been talking about who has been excluded from these kinds of arrangements," Lambert says from her Chicago office, noting a mild pang of guilt for the flexible workplace benefits she enjoys. "The people who really need flexible arrangements often don't have them."
While much attention in recent years has focused on minimum wage and so-called living-wage legislation, experts argue that for many low-wage workers, actual wages are less important than the schedule of work.
The Sept-Oct 2011
This article appears in our Sept-Oct 2011 issue under the title "Balancing Act." To see more articles from this issue, go to the Sept-Oct 2011 magazine page on Miller-McCune.com.
"There's a reason why so many low-paying jobs have high turnover rates, and it's not because people don't want to work," argues Lambert, who says studies show that about half of all part-time employees would prefer more work hours each week, and of those, 80 percent would prefer full-time employment. And yet, two-thirds of the retail stores in one study had employee turnover rates in excess of 80 percent. "People want to work, but they also need to care for sick children, go to the doctor ... the kinds of things that shouldn't cost you your job."
Jobs are scarce, even on the low end of the scale, and employers know it. If workers take time off for personal needs, for instance, or they decline a shift, they can be quickly replaced. Many employers within low-paying industries such as retailing, food service and manufacturing trim labor costs by using the "just-in-time" scheduling strategy — cutting worker hours on short notice when work is slow and adding hours quickly when demand improves. The practice wreaks havoc on workers' lives, many of them juggling second jobs, school, child care and other basic family needs.
Just-in-time scheduling works best, from the management point of view, when a company maintains a vast roster of eager part-time workers (who receive no health insurance, sick leave or other benefits). As a result, hourly workers at large retailers such as Target and Walmart routinely complain they are assigned only one or two days of work per week. But with a tight economy, they can't afford to quit, and the unpredictability of their schedules makes it difficult to attend classes or hold a second job. Lambert says the practice allows employers to "pass the risk of uncertainty in their business" onto their lowest-paid workers.
More than a third of the American workforce today is classified as low-wage (defined as earning less than two-thirds of the median earnings of male employees in the U.S., or about $13 an hour in 2010). And that figure is expected to grow. Low-wage jobs accounted for 76 percent of net job growth last year. The top four fastest-growing occupations — retail salespersons, cashiers, food preparation and food service workers such as waiters and waitresses — all pay national median hourly wages of less than $10. Most of those jobs, labor analysts say, will be filled by prime-age workers, who often cobble together more than one part-time job to make ends meet.
A year ago, President Barack Obama, citing the White House report "Work-Life Balance and the Economics of Workplace Flexibility," argued that American labor practices and policies have not kept pace with the changing economy and employment market.
Lambert and others agree that U.S. labor policy remains rooted in the nostalgic household ideal of a 9-to-5 husband with a stay-at-home wife. In fact, the number of women in the workforce is now more than double what it was in 1950 and is now essentially equal to the total for men. And earlier this year, the Census Bureau announced that for the first time in U.S. history, married couples account for less than half of all households, highlighting the importance of flexible work arrangements. Meanwhile, part-time jobs are replacing full-time positions in many low-paying industries as employers look to trim labor costs.
To be sure, many of those full-time jobs disappear as employers maneuver around the associated costs of health insurance, paid sick leave, severance pay and other benefits. In response, a few policy proposals have been floated, reflecting the changing employment patterns. Among them: expanding federal protections for part-time workers; a minimum weekly hour guarantee; and required flexible scheduling options. Others argue that federal labor laws should apply to small businesses, not just those with 50 or more employees, as under current law.
But opposition from employers remains strong and few political leaders champion the cause, a fact not lost on Lambert. "One of the goals of government is to mediate between the market and individuals," she says. "The market is volatile, and individuals need stability."
Lisa Horn, senior government relations adviser at the Society for Human Resource Management, says corporate America needs no prodding. Little by little, she insists, industries that rely on low-wage workers are adopting policies to promote better work-life balance. "There [is] still a lot more that companies can do, but legislative remedies are not the answer," she says. "If anything, [they] would hamstring employers from finding creative solutions to the work-life challenge."
Part of the solution must come from better awareness, adds Jennifer Swanberg, executive director of the Institute for Workplace Innovation at the University of Kentucky and the co-author of the report "Flexible Workplace Solutions for Low-Wage Hourly Workers: A Framework for a National Conversation." She notes a lingering "flexibility stigma" attached to low-wage workers at many firms. A study of call center employees found that hourly workers who participated in programs to enhance work-life balance received lower job performance ratings than workers who declined them. In another study, 94 percent of retail store managers say they favored workers who are willing to work any time the store is open. Indeed, only 28 percent of low-wage workers strongly believe that flexible work arrangements do not jeopardize career advancement.
With union influence ebbing, and with no clear legislative mandate on the horizon, Lambert says the pressure on companies to adopt worker-friendly policies such as flexible schedules, sick leave, vacation pay or shift-swapping must come from within. And that will happen, she believes, when employers are presented with the hard data showing that better work-life balance among its low-wage workforce makes good business sense.
Lambert's ongoing Scheduling Intervention Study has repeatedly shown that family-friendly policies for low-wage workers — both full time and part time - build employee satisfaction and loyalty and, in turn, reduce turnover. The study shows that total hours worked, the stability of hours worked week to week, and the option of flexible scheduling all correlate highly with employee retention. They also correlate with reduced stress, better health and stronger personal relationships.
In short, turnover declines when workers are better able to balance work-life conflicts. Studies also reveal that turnover is lower when part-time worker rolls are kept low, thus guaranteeing workers more hours.
And turnover isn't cheap. Virginia-based workforce management consultant Lisa Disselkamp calculates the cost at an average of 30 percent of a worker's annual wage, or $6,000 for someone earning $20,000. If a large retailer replaces 300 workers annually, as some do, she reports, finding new ones can cost $1.8 million.
The next phase of Lambert's Chicago clothing retailers study will examine intervention strategies, such as computerized scheduling, and better oversight and training for store managers. "We need accountability mechanisms for frontline managers," Lambert says. "We assume they are making rational choices, but that's very often not what we see."
Similar efforts to educate employers are under way at the University of California Hastings College of Law's Center for WorkLife Law. Earlier this year, the center produced a comprehensive report, "Improving Work-Life Fit in Hourly Jobs: An Underutilized Cost-Cutting Strategy in a Globalized World," outlining strategies such as shift-swapping, compressed work weeks, online scheduling, job sharing and personal leave in one-hour increments.
The report provides employers with real-world examples of successful work-life balance policies. Among them: Employee Resources Group, a Kentucky-based hotel staffing firm, which allows low-wage workers with young children to schedule shifts to coincide with school hours; and Marriott's global call center in Salt Lake City, which provides employees with flex-time coupons that can be used in hourly increments, allowing workers time off for personal and family needs.
Such policies are the exception, says Stephanie Bornstein, deputy director of the Center for WorkLife Law. "Managers still look at work-life-balance policies as a benefit for higher-paid workers, like themselves, not for part-timers and hourly employees," she says. "It's pretty evident that this kind of thinking is bad for the bottom line."
Firms that rely on low-wage workers are ignoring the data. When the career-services website Glassdoor.com released its ranking in May of U.S. employers with the best work-life balance policies, not a single firm from low-paying industries made the top 25. Lambert isn't surprised. "Company policies tend to reflect a bias toward higher-wage workers," she says. "The people who benefit most are the ones making the rules."