If you’re a “formula retailer” in San Francisco (defined as 11 plus stores), you have probably heard of the passage of the Retail Bill of Rights. You can read more here, but in short, the law requires a number of things related to employee hours and pay, including predictable work schedules, better schedule notices, less “on-call” abuse, minimum shift hours, and access to additional hours. There is little doubt that some of these changes will come with a greater financial burden to retailers, but the trade off may be lower shrink.
Whether it is direct cause or simply reflective of the changing dynamics of retail, we know from the statistics provided by the National Retail Security Study (NRSS), or the University of Florida Report, as it is often called, that there is a correlation between the percentage of part-time workers and shrink results. As one would anticipate, the more part-timers making up a company’s workforce, the higher their shrink tends to be. It is not that the presence of part timers causes shrink, but rather three key elements that are pervasive in a part time work force.
Consistency: The adage, practice makes perfect is true of most things. The issue with part-timers is they get less practice at learning and applying important loss prevention principles. Although the Retail Bill of Rights won’t necessarily change the part-time make up, it will provide greater consistency in work schedules. In other words, it has the power to create a “predictability” for the part-time employee and by allowing them to settle into a more consistent schedule they can spend more time becoming effective at their roles and less time worried about “how many hours” they are getting or not getting. Which helps in terms of the Bills second benefit
Commitment: If we accept that a culture of loss prevention is key to successful shrink reduction and management then we also have to accept that building such a culture requires employee commitment. Commitment is built on trust and fairness. When an employee feels taken advantage of or feels they are being abused, we are unlikely to motivate them to care about the company’s heath. Last minute schedule changes, sending employees home after an hour of work, and creating hardship with last minute schedule postings creates frustrations. Although these frustrations may not cause an employee to purposefully “hurt” a company, these annoyances do nothing to demonstrate a commitment to the employee and consequently we should expect none in return.
Turn over: Retail has one of the highest levels of turn over. Part of the reason is that some retail jobs are transitional, as in the case of students, part of the reason is retailers compete on recruiting, but some of the reason is retail employees are always trying to maximize their earnings through hours worked. Trying to juggle two jobs where last minute schedules create nightmares or where total hours are unpredictable often leads to employees seeking “greener grasses.” Lower turnover is a benefit to loss prevention. It means the training we do and the programs we build can be worked on for longer periods and that we are not in a perpetual state of re-training.
As stated, the Retail Bill of Rights will create some financial burden for retailers. There is, however, an opportunity to off set the down side with happier and more productive employees, lower shrink, and better executed operations. Once upon a time, retail ran on full time employees. These were folks who were committed to their company, their job, and their brand. San Francisco will prove to be an interesting experiment in terms of how these “quality of life” regulations impact overall performance. These changes would carry greater employee commitment if voluntary, but they still provide an excellent test of how small shifts in working conditions can impact our loss prevention goals.
Authored by: Ray Esposito