Variable work schedules – which employers increasingly use to maximize profits amid unpredictable market conditions – can actually undermine organizational performance, especially in crisis periods such as the pandemic, according to Cornell University research.
In a new study, doctoral student Hyesook Chung found that managers who rely on less stable variable work schedules experience higher turnover, due to the negative impact on workers’ economic security, health and work–life balance.
Additionally, Chung found the effect is likely to be more striking during a crisis such as the COVID-19 pandemic, since household financial and health-related distress is likely to be higher, and social systems that provide support are under duress. This higher store-level turnover, in turn, reduces the store’s financial performance, increasingly so as the crisis unfolds, she said.
“Tension between employers’ need for flexibility and employees’ need for predictability raises the question of whether or how the use of variable scheduling affects business outcomes,” Chung wrote in the study, “Variable Work Schedules, Unit-Level Turnover, and Performance Before and During the COVID-19 Pandemic” which published online March 14 in the Journal of Applied Psychology.
For decades, employers have altered the number and timing of employees’ work hours on a daily or weekly basis in order to respond quickly to changing conditions. Chung studied the impact of this practice by integrating insights from literature on flexible staffing, turnover and organizational resilience, with data from 1,678 stores of a U.S.-based fast-food restaurant chain.
“Research in the last decade has built a convincing theoretical and empirical record that workers in units with variable work schedules suffer from unstable earnings, negative mental and physical health outcomes, and work-life conflicts,” wrote Chung, a student in the field of human resources.
These factors, she said, lead to higher rates of turnover, more so during the height of COVID-19, as employees faced greater financial insecurity, work–life conflicts and lower well-being triggered by variable schedules.
Higher rates of turnover come with substantial costs in the best of times, she said, but during a crisis such as the pandemic, that turnover can lessen a company’s ability to adapt to the competitive and regulatory changes in the business environment.
Human resources theory suggests that flexible staffing can hedge against volume and demand uncertainty, but through this study, Chung found that its value can expire if overused because variable work schedules can beget another source of uncertainty: loss of human capital due to high turnover.
“This study has practical implications for managers,” Chung said. “While variable work scheduling may provide short-term solutions to demand volatility, managers should recognize their potential negative impacts on both workers and business performance.
“The findings suggest that managers need to rethink the implication of the environmental disruption (COVID-19 in this study) with respect to the use of certain HR practices,” she said. “In particular, the loss of human capital resulting from the use of flexible staffing practices may be a roadblock for firms seeking to bounce back from adversity.”
For additional information, see this Cornell Chronicle story.