Wal-Mart’s Flexible Employee Scheduling

Wal-Mart Logo

Some smart accountant at Wal-Mart woke up one day recently and realized that, with 1.6 million “associates”, they spend a lot of money on people. So, like any major employer, they decided to figure out ways to cut their costs on this huge expense.

However, unlike most other large employers, they decided to leverage computer power to figure out the problem. This follows in line with a great history at a company where Sam Walton was one of the first to use computers to calculate costs, measure sales, and optimize distribution. So Wal-Mart decided to put their employees’ schedules into the grinder and see what came out the other side.

The result was a computerized system that totally overhauled employee scheduling.

The result was a computerized system that totally overhauled employee scheduling. The system optimizes the schedule so that employees are matched with customer demand. It completely changes the balance of the scheduling equation from the employee saying “this is when can I work” to the company saying “this is when you can work”. Employees are, in effect, a fungible resource.

The Wall Street Journal had an article [ed: subscription-only content] that raked the company over the coals for this system. The key portion of the article is:

Staffing is the latest arena in which companies are trying to wring costs and attain new efficiencies. The latest so-called scheduling-optimization systems can integrate data ranging from the number of in-store customers at certain hours to the average time it takes to sell a television or unload a truck, and help predict how many workers will be needed at any given hour.

Companies also hope the scheduling systems will cut litigation by helping them comply with federal wage-and-hour laws, and variations at the state level on everything from the timing and frequency of breaks to how many hours minors can be scheduled. Moreover, retailers say tighter scheduling lets them better serve customers by shortening checkout lines.

This sounds fine in theory, and I’m all for better customer service. But the article goes on to say:

[The system] means workers may not know when or if they will need a babysitter or whether they will work enough hours to pay that month’s bills. Rather than work three eight-hour days, someone might now be plugged into six four-hour days, mornings one week and evenings the next.

This is the key to my objection with this system. Wal-Mart and their accountants seem to feel that their “associates” are simply another resource to be scheduled, like trucks or Cheerios deliveries. (As a side note, this is also why I have always objected to the term “Human Resources”, but I don’t have a better one…). A system that treats them as such misses all the key points that make people tick.

People are not automatons, they are not “resources”.

People are not automatons, they are not “resources”. They are highly unpredictable, remarkably resistant to change, and yet wonderfully flexible at the same time. They can be counted on to simultaneously perform miracles in the face of impossible tasks and yet drop the ball on the simplest of missions. And they deeply resent being treated like machines.

The heat from the Wall Street Journal Article was so hot that Wal-Mart felt compelled to issue a release within 48 hours that attempted to defend the new system. You can read it here. It is a really defensive piece that presents a 15 bullet point list of “advantages”. A couple of key points are:

We want our associates to be able to meet the needs of their family, educational needs, or secondary job needs and do what we can to help promote balance in the work place.

Our main goal is to ensure that we have the correct number of associates in our stores needed to serve the customers shopping which we believe results in better customer service hour by hour.

I love the part about “secondary job needs”. Does that really mean “our employees are so impoverished by our compensation that they need other jobs to make ends meet”? But I digress…

My favorite point in their rebuttal is:

Management has seen the amount of time spent on creating schedules by store managers go from 8-15 hours per week down to 15-30 minutes per week.

Good for them. That really is the point, isn’t it? It’s all about the company. Except that’s not the point. If you want the best of your employees, you have to treat them with respect. And treating them like trucks or robots doesn’t do that.