By Danielle Higley, TSheets by QuickBooks
If you’re the owner of a small business in a state like New York, California, or Washington, you may be looking at that headline thinking, “Yeah right. Have you ever tried to schedule a full roster of shift workers weeks in advance?”
For those in states where predictive scheduling laws are yet to be enacted, here’s a little refresher on what these laws mean for businesses, particularly retailers and those in the food industry.
Predictive scheduling laws at a glance
Predictive scheduling laws are state and city ordinances that require employers to provide shift workers with advance notice of their schedules. The idea is that predictive scheduling will help employees live more balanced lives. Receiving their schedules even 72 hours in advance can help workers better plan time with family and friends, arrange self-care and childcare, and fulfill other personal needs.
For many businesses, the idea behind predictive scheduling laws is all well and good, but such laws can put additional strain on employers and threaten the company’s bottom line. For instance, limiting a manager’s ability to keep workers “on-call” for busy shifts may cause a store or restaurant to be understaffed at peak times or overstaffed during an unexpectedly slow day. Where understaffing can negatively affect the customer experience, overstaffing can cause a business to spend more on payroll than needed.
Many laws also make scheduling more complicated by banning “clopens” (a closing shift, directly followed by an opening shift). For retailers already working to accommodate employee scheduling needs, getting rid of this flexibility doesn’t make the task any easier. Thus far, no federal legislation has been put in place, so predictive scheduling laws have varied from state to state, and even city to city.
For example, Oregon’s statewide Fair Workweek Act mandates employers post “voluntary standby lists” in lieu of mandatory “on-call” shifts. Meanwhile, cities like Seattle allow “on-call” shifts, with the stipulation that “on-call” employees receive half-time pay for any shifts they’re tentatively scheduled for but don’t end up working. Finally, there are states like New York, where on-call shifts are banned completely, but employers only need post the schedule 72 hours prior to a shift, as opposed to Seattle’s 14 days.
Each law has its own particulars, so it’s important that employers study the rules of their state or city. Businesses that break the law by asking workers to come in for previously unscheduled or non-compliant shifts face heavy fines.
3 positive repercussions of predictive scheduling laws
Now that we’ve covered the major points of what predictive scheduling could mean for your business, it’s time to get back to this article’s headline, because as advertised, there really are at least three really good reasons why predictive scheduling laws are good for business.
Predictive scheduling can save you money.
While predictive scheduling won’t always prevent overstaffing, it can help you save money in other ways. For one thing, it might get rid of those pesky “no-call-no-shows.”
According to a recent study of 500 U.S. business owners, 40% say they experience “no-call-no-shows” at least once a month. One in 10 says it happens to them every day. Even if your averages aren’t that high, only 2% of employers say they’ve never experienced a “no-call, no-show,” so chances are you’re not that lucky.
When employees don’t show up, businesses suffer and sales drop. Employees already on the clock end up staying longer to cover the missed shift, adding to an already exhausting workweek. On average, businesses take on $633 in additional operating costs each month, just from workers not showing up. That’s over $7,500 a year!
Predictive scheduling offers workers the chance to plan, creating fewer opportunities for missing work. Plus, when employees have a better work-life balance, they’re happier, which brings us to our second point.
Predictive scheduling makes for better employees.
This is the case for two reasons. The first, as mentioned, is increased happiness, which translates to everything from decreased turnover to higher engagement. And decreased turnover is definitely good for business.
According to a 2015 article in ERE Media, “For entry-level employees, it costs between 30-50 percent of their annual salary to replace them.” And mid-level employees cost more than 150% of their annual salary to replace. These numbers make for some pretty compelling reasons to do what you can, as a business owner, to make your employees — even the ones at the lowest level — want to stay.
Predictive scheduling leads to a better work-life balance, and that better balance means happier, more productive, more loyal employees. In fact, a 2013 study by the Hay Group found “more than 1 in 4 employees (27 percent) working at organizations that are not perceived to support work-life balance plan to leave their companies within the next two years.” But decreased turnover isn’t the only reason employers should be enthusiastically jumping on the predictive scheduling bandwagon.
Keeping trained employees around is good. Keeping trained and engaged employees around is better. According to a comprehensive white paper by Kyle LaMalfa of Allegiance, engaged employees are a company’s most valuable resource, as they demonstrate “improved performance” and “skill liquidity,” meaning they’re able to adapt easily to changing business needs. By accepting practices that promote employee happiness, you won’t just increase employee loyalty. You’ll improve employee engagement as well.
The second reason predictive scheduling makes for better employees has to do with hiring. For years, retail and food service have been viewed as industries where temporary workers go to earn a paycheck on their way to something better. But with predictive scheduling and increased opportunities for a healthy work-life balance, many shift workers may be tempted to make a more permanent career in the service industry, leading to more competitive candidates vying for open positions.
With more competition comes better selection and increased chances of hiring people who not only enjoy their jobs, but apply themselves to boosting sales, providing great service, and going above and beyond in everyday tasks.
Predictive scheduling may prompt companies to invest in time-saving technology alternatives.
The same study that found 40% of employers experience “no-call-no-shows” at least once a month also had a lot to say about how much time managers are spending on scheduling each week. While 1 in 10 respondents says they spend three hours per week building the schedule, some reported spending up to 12 hours on the task.
If you’re spending more time than you’d like on scheduling, you may be feeling especially unfavorable toward the new predictive scheduling laws in your area. These new regulations may take some time to work around — to research exactly how many shift workers you’ll need at different times since you may no longer have access to “on-call” employees, to figure out who’s going to open and who’s going to close since “clopens” may no longer be allowed, etc.
But with increased strain comes more incentive to pursue time-saving technology, like employee scheduling software that can help lessen the burden. Some apps even allow employees and employers to set reminders for upcoming work, reducing the chances of someone forgetting or overlooking a shift.
Predictive scheduling means big changes for businesses that depend on shift workers to get the job done. But bills of this kind don’t have to be a burden. By looking at the benefits predictive scheduling can have on employee morale and your bottom line, companies can choose to face an inevitable future with the perspective of a glass half-full.
About the Author
Danielle Higley is a copywriter for TSheets by QuickBooks, a time tracking and scheduling solution. She has a BA in English literature and has spent her career writing and editing marketing materials for small businesses. Last year, she started an editorial consulting company.