Scheduling – Not Pay – is the Service Sector’s Achilles’ Heel
The service industry is grappling with a hiring and scheduling crisis but is looking for answers in all the wrong places. Even as regulators and workers themselves push wages to the forefront of the conversation – driving chains like Starbucks and Wal-Mart to announce costly sweeping pay increases – many businesses have responded by overemphasizing hourly wages and have been neglecting some of their employees’ other needs affecting their overall pay. Although higher wages are a positive step forward, they bring added costs and pressure organizations to cut back hours. fail to address one of the prominent sources of hourly employees’ frustration and companies’ hidden labor costs: inconsistent scheduling practices.
If an employee is forced to give up just one shift due to unpredictable scheduling, this can make the difference in making ends meet that month. Such unpredictability in scheduling can have a more critical impact on a worker’s economic well-being than the minimum wage. Data from our recent survey of service company managers and hourly employees reveals a disconnect between service industry operators and the challenges affecting their frontline workforce.
Service sector firms continue to struggle with archaic scheduling practices
To some extent, businesses already recognize the need to reform their scheduling practices. Service industry managers rank worker availability as the second most challenging aspect of hiring hourly staff, while wages are relegated to fourth place. Most (68%) acknowledge that the toughest part of scheduling employees is assigning shifts that meet the company’s needs and workers’ preferences.
Despite this consensus, most businesses have done little to modernize their scheduling practices, and still rely on manual schedule creation and communication tactics. More than two-thirds of service companies (67%) generate schedules using paper templates or spreadsheets, and a comparable amount (68%) communicates shift assignments through physical charts.
This status quo has created roadblocks for both workers and their employers. Clunky scheduling practices and sub-par technology contribute to more than half of hourly employees receiving their schedules a week (or less) ahead of time, and nearly a third rarely receiving consistent shifts.
Existing solutions don’t address growing gaps
Organizations using digital scheduling platforms may believe they’ve already mastered the art of effective scheduling, but the truth is that many existing solutions use top-down approaches that provide only superficial gains.
Among the 31 percent of organizations that create schedules via online tools or software, familiar problems persist. Hourly employees report receiving consistent schedules the most often when shift assignments are distributed in person, and least often through scheduling software. Instead of providing a better solution, most tools on the market simply enable bad scheduling habits. In fact, 53 percent of managers admit to regularly making last-minute staff shift changes as necessary.
Over time, these seemingly minor tweaks jeopardize an employee’s income and restrict their ability to make plans in their personal lives. When a company’s scheduling practices favor business demands over people, morale plummets – and with it, profitability. Eventually, it drives employees to seek new opportunities, leaving employers to spend time and money recruiting their replacements.
Identifying the root of the problem
Months of regulatory attention and media backlash have compelled service industry employers to hone in on hourly pay. However, many are waiting too long to address festering – and more systemic – scheduling issues. Whether companies are prepared or not, this shift management situation is reaching a tipping point where employees are unwilling to make due with unpredictable hours as evident in burgeoning legal movements out of San Francisco, Massachusetts, and New York
Looking at the day-to-day experiences of both hourly workers and managers, it’s clear that the industry’s current practices aren’t sustainable. Service sector businesses need to adopt platforms that allow for employee engagement through consistent and collaborative communication, whether for creating schedules, requesting time off or managing employees’ shift changes.