Back in July 2005 we blogged the way Walmart squeezes its vendors to achieve the lowest possible prices. Today we read in the Wall Street Journal (paid subscription required) that the behemoth retailer is instituting a computerized scheduling system that enables it to use the same squeeze tactics on its own employees. Now that’s a shocker!
The plan involves moving workers from predictable shifts to a staffing pattern that is based on the number of customers in stores through the day and week. Workers may be asked to be “on call” to meet customer surges, or sent home because of a lull, resulting, of course, in less pay. The new systems also alert managers when a worker is approaching full-time status or overtime, which would require higher wages and benefits. Such individuals are red flagged – “descheduled” – so payroll costs remain as low as possible. Oh, the marvels of computerization! (I doubt the programmers at Kronos, who devised this system, are subject to similar payroll and benefit caps.)
What does this mean for Walmart workers? They might not know when or if they will need a babysitter or whether they will work enough hours to pay that month’s bills. They might have trouble scheduling doctor appointments. Senior employees, whose hourly rates are higher, might find themselves scheduled for fewer and fewer hours. Rather than working three eight-hour days, someone might now be plugged into six four-hour days, mornings one week and evenings the next. Unless they live near the store, they’re going to spend a lot more time commuting.
The benefits to the company are pretty obvious: lower payroll costs; less time spent on scheduling for local managers; and more people on the floor when you need them, especially during midday and evening shopping surges. The goal of “enhancing the shopping experience” will be readily achieved. As for the problems the new system creates for workers, Walmart apparently will just take their chances. As they say, if you want make wine, you have to crush the grapes.
Compensable “To and Fro”
By instituting this extreme version of flex scheduling, Walmart has inadvertantly opened the door to new workers comp liabilities. Normally, the “to and fro” commuting time for employees is not covered by workers comp. Your workday – and your comp coverage – begin when you arrive at the workplace. However, in most states there is an exception for “on call” workers. Because they have no set schedule, but must appear when called (or leave when no longer needed), workers comp coverage begins when they receive the call and head out to work and it continues when they are sent home. Their coverage includes the commute in both directions. Walmart may have succeeded in reducing the payroll, but they have significantly increased their workers comp exposures. (Given the management style at Walmart, they cannot be comfortable with the fact that commuting itself is totally unsupervised.)
I imagine that Walmart managers will not lose much sleep over this problem. Filing a claim for a work-related injury – whether it occurs onsite or off – is probably a daunting and perhaps even intimidating process. If this new scheduling system succeeds in lowering costs, it will surely be copied by others. Wall Street will love it. It’s good for consumers, eternally in search of bargain prices. It’s good for shareholders: lower payroll costs means higher profitability. Sure, it’s tough on the marginally skilled workers trying to raise families and balance their own budgets. If they don’t like it, they can go work for Target or Radio Shack (where they will find similar systems already in place).
