The Pitfalls of Variable Work Schedules

For decades, employers have increasingly used variable work schedules – altering the number and timing of employees' work hours on a daily or weekly basis – in order to respond quickly to unpredictable market conditions in an effort to maximize profits. However, new research by ILR doctoral student Hyesook Chung suggests that variable work schedules can undermine, rather than improve, organizational performance, especially in a crisis situation such as the pandemic.

“Variable Work Schedules, Unit-Level Turnover, and Performance Before and During the COVID-19 Pandemic” will publish in the April edition of the Journal of Applied Psychology.

Chung integrates insights from literature on flexible staffing, turnover and organizational resilience, with data from 1,678 stores of a U.S.-based fast-food restaurant chain. She found that managers who rely on more unstable variable work schedules experience higher turnover due to its negative impact on workers’ economic security, health and work–life balance.

Additionally, Chung finds the effect is likely to be more striking during a crisis, such as the COVID-19 pandemic, since household financial and health-related distress is likely to be higher, and social systems that provide support are under duress. Chung indicates that this higher store-level turnover, in turn, reduces the store’s financial performance, increasingly so as the crisis unfolds.

“Tension between employers’ need for flexibility and employees’ need for predictability raises the question of whether or how the use of variable scheduling affects business outcomes,” Chung writes. “In particular, are trade-offs between business and employee outcomes zero-sum, or might businesses also benefit from reducing their reliance on flexible staffing? To address this question, I examine unit-level (store) turnover as the mechanism through which the use of variable work schedules affects organizational performance.”

Chung notes that “research in the last decade has built a convincing theoretical and empirical record that workers in units with variable work schedules suffer from unstable earnings, negative mental and physical health outcomes, and work-life conflicts.” These factors, she argues, lead to higher rates of turnover, more so during the height of COVID-19, as employees faced greater financial insecurity, work–life conflicts and lower well-being triggered by variable schedules.

Higher rates of turnover come with substantial costs in the best of times, but during a crisis such as the pandemic, that turnover can lessen a company’s ability to adapt to the competitive and regulatory changes in the business environment.

HR theory suggests that flexible staffing can hedge against volume and demand uncertainty, but through this study, Chung finds that its value can expire if overused because variable work schedules can beget another source of uncertainty: loss of human capital due to high turnover.

“This study has practical implications for managers,” Chung said. “While variable work scheduling may provide short-term solutions to demand volatility, managers should recognize their potential negative impacts on both workers and business performance. The findings suggest that managers need to rethink the implication of the environmental disruption (COVID-19 in this study) with respect to the use of certain HR practices. In particular, the loss of human capital resulting from the use of flexible staffing practices may be a roadblock for firms seeking to bounce back from adversity.