OM in the News: White Collar Perks for Hourly Workers

My neice, who works for a local vet clinic, recently had a baby and I have watched how her schedule is often disrupted by her growing family’s needs. She is not alone. The Wall Street Journal (Oct.3, 2011) describes how about 1/2 of all low-wage, hourly employees have “little or no” control over their schedules and nearly 1/3 are required to work overtime with scant notice. This can lead to absenteeism and turnover in businesses that rely heavily on hourly workers. One study even showed that 30% of workers took time off the job for family issues during a single week. With turnover rates as high as 80%-100% in hourly retail employees, this becomes a big issue. Replacing a single worker can cost 30% of the annual wage.

So it is not surprising that companies in industries such as retail, food service, hospitality, call centers, and manufacturing, are exploring ways to provide the flexible scheduling found in the white collar workplace. Kaiser Permanente and Marriott have implemented innovative policies such as providing paid time off in shorter (part-day) increments, so workers can schedule school or doctor appointments without losing a entire day’s work. They are also providing leeway on shift start and end times–allowing workers to be available for a school pickup, for instance. One Minnesota manufacturer is considering letting factory workers to do some of their tasks (like labeling) from home. And some firms are giving hourly workers more lead-time on their schedules. A typical retail schedule for the week beginning on a Sunday can be posted as late as the Thursday before, which makes it difficult to secure family care on short notice.

 The bottom line, which we discuss in Chapter 10’s Human Resource Strategies, is that firms can benefit from decreased employee turnover and higher employee engagement by “matching the workplace to the work force”.

Discussion questions:

1. Why is employee scheding a major OM issue?

2. What other flex policies might a firm use to increase employee satisfaction and productivity?