When companies promote work-life balance for low-wage workers, everyone wins
A small group of Chicago clothing retailers is challenging 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 are correct, higher worker satisfaction at those stores will boost employee morale, retention rates, and productivity, pushing labor costs down and revenues up. Meanwhile, employees 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. Lambert is among a handful of people exploring one of the most overlooked areas of labor policy: work-life balance at the bottom of the pay scale.
The flexible workplace benefits the professional class often takes for granted—maternity and sick leave, time off for family emergencies, control over 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 multiple jobs, have greater health care needs, be single parents and caregivers, and have difficulty commuting to their jobs.
While much attention in recent years has focused on minimum wage and so-called living-wage legislation, experts argue that actual wages are less important than the work schedule.
“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,” contends Lambert, who says studies show that about half of all part-time employees would prefer more work hours. And yet, two-thirds of the retail stores in one study had employee turnover rates in excess of 80 percent. People need to care for sick children, go to the doctor, “the kinds of things that shouldn’t cost you your job,” she says.
Many employers within low-paying industries such as retail, food service, and manufacturing trim labor costs by using the “just-in-time” scheduling strategy—cutting worker hours on short notice when things are slow and adding hours quickly when demand improves. The practice wreaks havoc on the lives of workers, many of whom juggle second jobs, school, child care, and other basic needs.
Just-in-time scheduling works best, from the management perspective, 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 employees routinely complain that they are assigned only one or two days of work per week. With a tight economy, though, they can’t afford to quit. Lambert says the practice allows employers to “pass the risk of uncertainty in their business” on to 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 United States, or about $13 an hour). And that figure is expected to grow. Low-wage jobs accounted for 76 percent of net job growth last year.
In 2010 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. 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 that reflect the changing employment patterns have been floated. Among them: expanding federal protections for part-time workers, a minimum weekly hour guarantee, and required flexible scheduling options. Others assert that federal labor laws should apply to small businesses, not just those with 50 or more employees.
But with union influence ebbing and no clear legislative mandate on the horizon, Lambert says, the pressure on companies to adopt worker-friendly practices must come from within. And that will happen, she believes, when employers are presented with hard data proving 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.
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, finding new ones can cost $1.8 million.
The next phase of Lambert’s clothing retailers study will examine intervention strategies, such as computerized scheduling, and better oversight and training for store managers. Similar efforts to educate employers are under way at the University of California Hastings College of Law’s Center for WorkLife Law. The center provides 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 flex-time coupons that can be used in hourly increments, allowing time off for personal needs.
Firms that rely on low-wage workers, however, are ignoring the data. In May Glassdoor.com released its ranking of U.S. employers with the best work-life balance policies, and not a single representative from low-paying industries made the top 25. Lambert isn’t surprised. “Company policies tend to reflect a bias toward higher-wage workers,” Lambert says. “The people who benefit most are the ones making the rules.”
David Villano is an award-winning Miami-based journalist who has contributed to the Miami Herald, Newsweek, Mother Jones, and the Columbia Journalism Review. Excerpted from Miller-McCune (Sept.-Oct. 2011), a bimonthly magazine dedicated to smart journalism and real solutions. www.miller-mccune.com