Abstract for:Needing more by giving less: Do Flexible Labor Strategies Help Reduce Labor Costs?
Retail is the largest employer in the United States. Retailers employ flexible labor strategies to minimize the mismatch between the demand and supply of employee hours. As a result, retail jobs are characterized by unstable schedules where employees work different hours from week to week and with an average that is inadequate for their needs. There is compelling evidence that unstable schedules hurt low-wage retail employees. In this paper, I examine whether flexible labor strategy can actually deliver on the promise of reduced labor cost. Building on existing qualitative and quantitative studies, I build a model to explore the impact of flexible labor strategies on store-level outcomes. To capture the impact of employee schedules on store outcomes, the model includes and connects individual and store level variables. I calibrate the model to 52 weeks of data from a single specialty retailer store. Calibration results suggest that the model is a good fit to the observed data and the store might be using 10% more employee hours. I present econometric data analyses to support the model effort and discuss further empirical possibilities.