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The Gap is ending on-call schedules. Here's why the practice was making workers miserable.

Don Kelsen/Los Angeles Times via Getty Images

In recent years, labor rights groups have campaigned against a common management tactic called on-call scheduling. In an effort to save costs, many retailers require workers to call in just an hour or two before a shift starts to find out if they'll be able to work. That uncertainty can create chaos in workers' finances and personal lives, and it's particularly difficult for workers who need child care.

In a Wednesday blog post, the Gap announced that it is planning to phase out on-call scheduling by the end of September. The move follows earlier announcements by Abercrombie & Fitch and Victoria's Secret, which are also phasing out the practice.

Sonsira Espinal worked for a clothing retailer in New York, and she told me a few weeks ago that on-call shifts were the most frustrating part of her work schedule. "It gets frustrating because you want to work and make money and pay your bills," said Espinal, a member of a workers' rights group called the Retail Action Project. Often, she'd make herself available for a day's work, then be told not to come in.

A new generation of software gives employers the ability to manage their labor costs more precisely than ever before, and this often leads to unpredictable and volatile work schedules.

But the fact that employers can use these techniques doesn't necessarily mean they should. They can save employers money, but they often make lives miserable for low-income workers. And in the long run, treating workers poorly isn't necessarily a good business strategy. Companies such as Costco have figured out how to run a profitable retailer while offering workers stable and predictable schedules.

Managers are under pressure to cut costs

I asked Anna Haley-Lock, a professor at the school of social work at the University of Wisconsin, how employers set their employees' schedules. She told me that many companies have sophisticated programs that track employee hours in 15-minute increments and help managers make scheduling decisions.

These programs are "value-neutral," meaning they can be used to give workers predictable schedules or erratic ones. But they give managers the ability to manage labor costs in a fine-grained way that might have been challenging in the pre-digital world.

Employers using scheduling software, Haley-Lock says, can "track sales and labor expenditures. If that ratio begins to look labor-heavy, they are eager to reduce the amount of labor expended. They will send people home early and they'll call folks off of shifts."

In larger organizations, managers often feel pressure to do this because they are given strict targets for labor costs. If sales fall short on a particular day, managers have to cut worker hours to hit their targets.

But Haley-Lock says it's not only large companies that have adopted software-based just-in-time scheduling techniques. Small businesses do it too.

For example, Haley-Lock visited a "little private ma-and-pa restaurant in a rural area of Washington state. The owner walked me through with great enthusiasm the Excel spreadsheet he used to track his labor-to-sales ratio. He'd track it on an hourly basis and would use it to send workers home."

Just-in-time scheduling isn't great for workers

Miami Valley Centre Mall

(Nicholas Eckhart)

The trend toward using computers to more tightly manage workers' schedules parallels the trend of just-in-time manufacturing. In the past couple of decades, manufacturers have used sophisticated software to slash inventories and order new parts at the last minute. This not only cuts down on warehousing costs, it also makes the whole production process more nimble, because manufacturers can switch to new and improved components as soon as they're available.

Many employers have tried to apply this nimble, waste-conscious attitude toward their workforces. But there's an important difference: Parts in a warehouse don't have personal lives. Workers do. When a company takes principles developed for supply chains and applies them to its labor force, the result can be chaos for workers.

"You’re waiting on your job to control your life," Jannette Navarro, a Starbucks employee in San Diego, told the New York Times last year. She found out each week's schedule just three days ahead of time, and she said that Starbucks software often determined everything from how much sleep her son would get to "what groceries I’ll be able to buy this month." (Starbucks changed its scheduling policies after the Times article was published.)

Erratic shifts that vary from week to week make workers' schedules challenging enough. On-call shifts make things even worse. If the employer cancels a shift, the worker generally gets no pay — and might still be on the hook for child care expenses.

The use of on-call shifts, and variable schedules more generally, also creates a lot of uncertainty about workers' incomes from week to week. If business is slow for several weeks in a row, workers can wind up not making enough money to pay the rent. Espinal, the New York retail worker, says there were some parts of the year, such as after the holidays, when she could go days without getting a single shift.

In a closely related practice, some employers will respond to unexpected demand by calling workers at the last minute and asking them to work unscheduled shifts. Espinal said that during the holidays she would be asked to stay on for extra hours at the end of her shift. That made it hard to have a social life, because she couldn't make plans with friends after work. "You can't really plan ahead or map out your day or week," she says.

The prevalence of on-call shifts and last-minute call-ins make it hard for workers to earn extra income by taking two jobs. It's becoming common for retail stores and restaurants to build large rosters of employees, giving many employees less than 30 hours of work per week. That wouldn't be so bad if employees had predictable schedules and could supplement their earnings with a second part-time job. But if workers don't have control over the schedules — and don't know if they'll be working until just hours ahead of time — it can be hard to find time for the second job, to say nothing of personal responsibilities.

In this respect, a restaurant or retail establishment with "flexible" hours is the opposite of ride-hailing services like Uber and Lyft. Both types of employment involve irregular hours, but with Uber and Lyft, the drivers decide when and how long to work. They never have to worry about being unable to get the hours they want.

Labor law provides little protection against erratic schedules

You might think labor law would provide workers with some protections against erratic schedules, but that's generally not the case.

"From an employment law perspective, scheduling is pretty much unregulated," says Charlotte Alexander, a legal scholar at Georgia State University. Indeed, most worker protections related to scheduling take the existence of a schedule for granted.

For example, if a worker reports for his scheduled shift and then is sent home without pay, some states require the worker to be paid a minimum amount — usually between two and four hours of work. But if an employer simply refuses to make a schedule until shortly before a shift starts, these laws don't apply.

Indeed, Alexander worries that beefing up some of the existing worker protections, which take schedules as a given, will push employers toward abandoning schedules altogether, relying instead on a fully on-demand model in which workers don't learn if they have work until the last minute. "I would be afraid about nudging employers any closer to an all-contractor, all-temp world than they're already going," she says.

Instead, Alexander argues, the law should directly regulate scheduling. For example, the law might require employers to provide employees with their schedules a minimum number of days ahead of time. Employers that failed to provide sufficient notice — or who canceled shifts at the last moment — would be required to pay workers extra to compensate them for the inconvenience.

Costco provides a better model

Costco

(Mike Mozart)

While just-in-time scheduling techniques have become increasingly common, Haley-Lock stresses that they're not universal. And she argues that companies can turn a profit while providing their employees with predictable schedules and adequate notice of their work hours.

A good example is Costco, a discount retailer that puts a premium on treating its employees well. Haley-Lock and University of Chicago scholar Susan Lambert recently did an in-depth study of Costco's labor practices. With Costco's cooperation, they interviewed managers at a number of Costco locations in Illinois and Washington State. And they found that Costco workers do not suffer from the kind of scheduling instability many other retail workers do.

"Costco is as concerned about profit as the next competitor," Haley-Lock says. "But they think about work hours differently and how they handle and allocate work hours very differently."

She says that Costco "ties their own hands" by guaranteeing full-time workers 38 hours per week and part-time workers 24 hours. Rather than forcing workers to leave early, the company will ask for volunteers — and if no one volunteers, no one will get sent home.

Having a company-wide policy in place protecting workers against unstable work hours changes managers' incentives. Rather than sending workers home at the first sign that business is slow, managers have to look for ways to keep workers busy through the end of their shifts.

One way they do this is by training workers to be proficient in multiple parts of the store, Haley-Lock says. That's valuable on days when demand is high in one part of the store and low in another. Rather than sending someone home in one department and calling in a different person in another — as other retailers might — Costco will transfer a suitably trained worker to the understaffed section of the store.

And, of course, treating employees well makes them less likely to quit, which can reduce recruitment and training costs.

Treating employees well can be good business

Other employers have had similar experiences. Haley-Lock tells the story of two restaurants — one an upscale "fast casual" restaurant, the other a "cheap family dining" restaurant. The manager of the family dining restaurant told her, "I often lose people who go across the street to the place that pays a little more an hour." However, he said, "then I get them back because they don't get the hours" at the higher-paying restaurant.

Workers don't have much bargaining power individually, but in a market as competitive as the restaurant and retail industries, employers can still benefit from treating their workers better. Employee turnover is a major cost for low-wage employers, and overly aggressive use of just-in-time scheduling techniques might wind up costing more than it saves once recruitment and training costs are taken into account. Restaurants and stores that offer their employees predictable shifts may be able to pay a bit less, and they're likely to hold on to each employee for longer.

Scheduling software can obscure this reality. It can provide short-term "savings" that don't actually save much money because they increase employee dissatisfaction in the long run. Over time, employers may learn to use scheduling software to more precisely manage demand, while avoiding the excesses that make employees miserable.


Correction: An early version of this article suggested that work hour instability was increasing. However, the evidence for this is weak, so I've removed the claim.