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Stable Scheduling Increases Sales 7%, Harvard Business Review

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Hard Evidence for Scheduling Software

The Harvard Business Review recently highlighted a study from the University of North Carolina business school that showed staggering sales numbers stemming from improvements in the scheduling process. The $50,000 study “contests the widespread conventional wisdom that unstable schedules are impossible and/or uneconomic in today’s fast-paced, low-margin retail environment.”

Looking closely at the hourly workforce (particularly food service and retail), researchers aimed “to determine if it is possible to improve schedule stability without hurting financial performance.” As it turns out, improved scheduling has a staggeringly net-positive result on the bottom line—specifically on median sales, which saw a 7% increase.

Researchers from the University of Chicago and UNC Chapel Hill schools of business used two fundamental practices as a baseline for scheduling stability of both the control and treatment groups.

  1. Elimination of on-call shifts
  2. Two-week advance notice of schedule

 

Outlined more specifically in the study, these two practices set a statistically-valid precedent to measure the effects of further scheduling manipulation. Five additional practices were added to the treatment group as an “intervention.” They are as follows:

  1. Tech-enabled Shift Swapping - Using a scheduling app, associates could swap shifts instantaneously, and managers could post additional shifts as need arose.
  2. Stable Shift Structure - Managers endeavored to increase the consistency of shift start and end times in their store across days of the week.
  3. Core Scheduling - Managers aimed to improve the consistency of their associates’ shifts (days and times) from week to week.
  4. Part-time Plus - Managers offered a core team of associates a soft guarantee of 20 or more hours a week.
  5. Targeted Additional Staffing - The research team analyzed store data to identify which stores would be likely to increase their sales by adding additional staff to the sales floor at consistent specified times, and these stores received additional staffing hours at no cost to the store budget

These extra practices made for a tremendous difference between the control and treatment groups. Researchers found that giving employees more schedule stability actually increased both sales and labor productivity, signaling a high return on investment.” Other major findings from the study are listed below.

 

5 Major Findings from the Study:

01. Return on investment was high.

The only out-of-pocket cost associated with stable scheduling was roughly $31,200 spent on Targeted Additional Staffing. Even taking into account the additional time spent implementing the full intervention, we expect the ROI in stable scheduling to be high. If stable scheduling were adopted enterprise-wide, however, transition costs might well entail upgrading or replacing existing software systems.

 

02. Consistency, predictability, and worker input increased.

The size of the increase in these dimensions of schedule stability seems modest, but we have few benchmarks for comparison. Even these modest increases in scheduling stability delivered pronounced improvements in business outcomes.

 

03. Stable scheduling sharply increased median sales by 7%.

Sales increased an average of 7% in treatment stores during the intervention period—a dramatic increase in an industry in which companies torture themselves to achieve bumps of even 1–2%. We estimate that shifting to more stable schedules, over a 35-week period, yielded $2.9 million in increased revenues for Gap in the 19 treatment stores.

 

04. Stable scheduling significantly increased labor productivity by 5%.

Treatment stores generated an additional $6.20 of revenue per hour of labor than did control stores. This increase in productivity was likely driven by improved retention of more seasoned sales associates in stores that shifted to more stable scheduling. (Overall retention remained unchanged.)

 

05. Fluctuating customer demand is not the primary source of instability.

A widespread assumption – that fluctuations in customer demand make stable schedules impossible in retail – is inaccurate. Only 30% of the variability in weekly payroll hours was explained by changes in traffic from week to week. Store managers identified the following key sources of headquarter-driven instability: inaccuracies in shipment information, last-minute changes in promotions, and visits by corporate leaders.

 

The Appeal of Unstable Scheduling

Despite irrefutable increases in both sales and labor productivity, business owners still cling to the familiar. The researchers attributed this to the hidden costs of unstable scheduling. They make special mention of employees with low availability—due to school or other jobs—refusing shifts simply because of poor scheduling practices (eg. short notice). “Once a company gets the reputation of offering short, part-time hours, the only workforce they can attract is a low-availability workforce.” By this point, the company’s “commitment to unstable scheduling reflects not business realities but an organizational failure.”

While the study is still too fresh to upend the dynamics around scheduling practices, it should certainly get the attention of employers unconvinced of their scheduling process.

 

If you’re looking to bring stability to your scheduling, don’t hesitate to reach out.

 

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About Author

Adam Lambert
Adam Lambert

A Tennessee native, Adam Lambert is a creative writer based in Salt Lake City.

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