Abstract for: Digital Platforms and the Fissured Workforce: Consequences of Temporary Labor Strategies in Service Operations

Service organizations frequently rely on temporary workers to manage workload fluctuations, particularly in industries characterized by unpredictable demand. While temporary labor strategies offer immediate flexibility and lower fixed costs, they introduce unintended long-term inefficiencies. We study the organizational consequences of relying on temporary labor as a response to workload pressure in service operations. We clarify the long-term impacts of temporary labor strategies on service performance, workforce productivity, and operational stability. We developed an SD model to simulate labor strategies in a logistics-focused service organization, and capture key dynamics influencing workforce composition, productivity, and service performance. We consider four key sectors: 1. Processing and Shipment 2. Workforce Dynamics 3. Capacity Adjustment 4. Performance and Feedback The model incorporates empirical data from an industry partner. Historical data on workforce turnover, training timelines, and demand fluctuations informed the model's parameter calibration. This is current work in progress research. Preliminary simulations reveal significant insights into the trade-offs between flexibility and stability in workforce planning. We contrast 3 different labor strategies: 1. Temporary Labor Strategy (TLS) 2. Mixed Labor Strategy (MLS) 3. Permanent Labor Strategy (PLS) Our findings suggest that managers frequently underestimate the compounding effects of turnover on workforce productivity By the time of the System Dynamics Conference, we will have fully explored our working model, and plan to: • Extend the model to include behavioral dynamics, such as employee morale, organizational commitment, and the psychological effects of job insecurity on productivity. • Explore the role of managerial decision biases when determining hiring and firing policies. • Investigate alternative intervention strategies, such as improved onboarding processes, knowledge-sharing incentives, and enhanced retention initiatives, to mitigate the negative impacts of turnover.