Retailers and restaurants rely heavily on part-timers to significantly cut payroll costs.
Since the Fresh & Easy grocery chain was founded five years ago, it has opened 150 markets in California and positioned itself as a hip, socially responsible company.
A cross between Whole Foods and Trader Joe’s, the company brags that its house brands have no artificial colours or trans fats, that two-thirds of its produce is grown locally and that its main distribution center is powered by a $13 million solar installation. But in one crucial respect, Fresh & Easy is just like the vast majority of large American retailers: Most employees work part time, with its stores changing many of their workers’ schedules week to week.
At its store at Spring Valley, just east of San Diego, Shannon Hardin oversees seven self-checkout stations, usually by herself. Typically working shifts of five or six hours, she hops between stations – bagging groceries, approving alcohol purchases, explaining the checkout system to shoppers and urging customers to join the retailer’s loyalty program, all while watching for shoplifters.
“I like it. I’m a people person,” said Hardin, 50, who used to work as an office assistant at a construction company until times went bad. But after nearly five years at Fresh & Easy, she remains a part-time worker despite her desire to work full time. In fact, all 22 employees at her store are part time, except for the five managers.
She earns $10.90 an hour, and with workweeks averaging 28 hours, her yearly pay equals $16,500. “I can’t live on this,” said Hardin, who is single.
“It’s almost impossible.” While there have always been part-time workers, especially at restaurants and retailers, employers today rely on them far more than before as they seek to cut costs and align staffing to customer traffic.
This trend has frustrated millions of Americans who want to work full time, reducing their pay and benefits.
“Over the past two decades, many major retailers went from a quotient of 70 to 80 per cent full-time to at least 70 per cent part-time across the industry,” said Burt P Flickinger III, managing director of the Strategic Resource Group, a retail consulting firm.
No one has collected detailed data on part-time workers at the nation’s major retailers. However, the Bureau of Labour Statistics has found that the retail and wholesale sector, with a total of 18.6 million jobs, has cut 1 million full-time jobs since 2006, while adding more than 500,000 part-time jobs.
Technology is speeding this transformation. In the past, part-timers might work the same schedule of four- or five-hour shifts every week. But workers’ schedules have become far less predictable and stable. Many retailers now use sophisticated software that tracks the flow of customers, allowing managers to assign just enough employees to handle the anticipated demand.
“Many employers now schedule shifts as short as two or three hours, while historically they may have scheduled eight-hour shifts,” said David Ossip, founder of Dayforce, a producer of scheduling software used by chains like Aeropostale and Pier 1 Imports. Some employers even ask workers to come in at the last minute, and the workers risk losing their jobs or receiving fewer hours in the future if they are unavailable.
The widening use of part-timers has been a bane to many workers, pushing many into poverty and forcing some onto food stamps and Medicaid. And with work schedules that change week to week, workers can find it hard to arrange child care, attend college or hold a second job, according to interviews with more than 40 part-time workers.
Extra money
To be sure, many people prefer to work part time – for instance, college students eager for extra spending money and older people who work during the holiday season to earn money for gifts. But in two leading industries – retailing and hospitality – the number of part-timers who would prefer to work full time has jumped to 3.1 million, or 2 1/2 times the 2006 level, according to the Bureau of Labour Statistics.
In retailing alone, nearly 30 per cent of part-timers want full-time jobs, up from 10.6 per cent in 2006. The agency found that in the retail and wholesale sector, which includes hundreds of thousands of small stores that rely heavily on full-time workers, about three in 10 employees work part time.
Retailers and restaurants rely heavily on part-timers not only because it gives them more flexibility, but because it significantly cuts payroll costs. According to the Bureau of Labour Statistics, part-time workers in service jobs received average compensation of $10.92 an hour in June, made up of $8.90 in wages plus benefits of $2.02.
Full-time workers in that sector averaged 57 per cent more in total compensation – $17.18 an hour, made up of $12.25 in wages and $4.93 in benefits. Benefit costs are far lower for part-timers because, for example, just 21 per cent of them are in employer-backed retirement plans, compared with 65 per cent of full-timers.
At the Fresh & Easy store, Hardin is forever urging her boss to give her more hours, she said, but instead, “they turn around and hire more people.” Some weeks, her boss gives her an extra shift when a co-worker is sick or on vacation.
Officials of Fresh & Easy, which is owned by Tesco, the largest supermarket company in Britain, declined to be interviewed. But the company noted that its entry-level pay was $10 an hour, substantially higher than at most retailers, with quarterly bonuses on top of that. Also, the company said it offered excellent benefits, including health insurance to anyone averaging more than 20 hours a week.
With the Kronos software, scheduling takes just 30 minutes. The software keeps tabs on when workers are available, their skills and who makes the most sales per hour. While such software is a powerful tool, management’s judgment is still important, said Aron J Ain, Kronos’ chief executive.
“The budget is how many people you need at a certain time,” he said, “but the magic is deciding who is to work at what time.” The rise of big-box retailers like Wal-Mart, with their long operating hours and complex staffing needs, has contributed to the increase in part-timers.
Flickinger, the retail consultant, said that when Wal-Mart spread nationwide and opened hundreds of 24-hour stores in the 1990s, that created intense competitive pressures and prompted many retailers to copy the company’s cost-cutting practices, including its heavy reliance on part-timers.
A 2011 survey of 436 employees at retailers in New York City, as diverse as luxury establishments on Fifth Avenue and dollar stores in the Bronx, found that half of the city’s retail workers were part time and only 1 in 10 part-time workers had a set schedule week to week. One-fifth said they always or often had to be available for call-in shifts, according to the survey, which was overseen by researchers at City University of New York.
“We’re seeing more and more that the burden of market fluctuations is being shifted onto the workers, as opposed to the companies absorbing it themselves,” said Carrie Gleason, executive director of the Retail Action Project, an advocate for retail workers that helped conduct the survey and is financed by foundations and the Retail, Wholesale and Department Store Union.
