Keeping Labor Flexible in Hourly Retail Jobs: Repercussions for Employment Stability

Background: The economic recession is drawing needed attention to the vulnerability of workers and families. There is growing concern that employer practices around hiring and scheduling contribute to the precariousness of employment, especially for hourly workers. Recent research indicates that many employers favor “labor flexibility practices” that allow for the ready adjustment of staff size and work hours (Lambert, 2008). The current study extends this line of inquiry by addressing the following research questions in a national retail apparel firm: (1) What labor flexibility practices do store managers use to contain labor costs? (2) What are the patterns of employment stability in this firm? (3) How are labor flexibility practices related to two key measures of employment stability, turnover and retention?

Methods: The study draws on two sources of data from one retail firm with stores concentrated in Midwestern and Eastern states (N=151 stores). Monthly corporate data that track all employees (N=1,572) in the 151 stores for 2007-2008 are linked with manager telephone survey data (n= 137 managers; response rate = 91%) collected in 2007. The workforce is 99% female, average age of 38, and racially and ethnically diverse (58% white, 30% African American, 9% Latino, 3% other ethnic membership). Descriptive statistics of manager survey responses are used to identify labor flexibility practices (Question 1). Corporate data are used to calculate store-level cumulative turnover (the sum of monthly turnover rates) and sustained employment (the proportion of workers employed at a store at Time 1 and who remained one year later) (Question 2). Multivariate regression is used to estimate the relationship between labor flexibility practices and cumulative turnover and sustained employment (Question 3).

Results. Question 1: Manager survey data reveal several staffing and scheduling practices used to contain labor costs. Managers rely disproportionately on part-time employees (66% to 90%), almost two-thirds prefer a staffing strategy emphasizing a larger workforce that can be scheduled for varying shifts over one emphasizing a small, regular staff. Scheduling practices reflect “just-in-time” strategies that provide limited prior notice of schedules (64% post schedules less than one week in advance), with little employee input and frequent adjustments after posting. Importantly, there is heterogeneity across store managers in these practices. Question 2: The average 2007 cumulative turnover rate for the sample is 85%; this varies among stores (10% - 180%). Rates of sustained employment average 62% in 2007 (30% - 85%). Question 3: Controlling for store and worker characteristics, staffing and scheduling strategies are significantly related to turnover and sustained employment. Notably, sustained employment is significantly related to the proportion of fulltime jobs, basic staffing strategy, advance notice, and hiring preferences.

Conclusion: To date, researchers have paid more attention to individual barriers to employment than to employer practices that structure instability into jobs. Our findings highlight the importance of attending to management practices that contribute to workers' labor market prospects. The results suggest that targeting staffing and scheduling for intervention or legislation could benefit both firms and families. Promising workplace interventions and government legislation will be discussed.