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Wal-Mart seeks to 'organize' labor its own way
But some employees are irked that the plan could 'turn their lives upside down' if it replaces steady shifts with rotating schedules.
By Parija Bhatnagar, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) - A group of Wal-Mart employees from Pensacola, Florida say their lives will be turned "upside down" if the retailer implements a new scheduling policy that would require workers to adapt to shift rotations instead of maintaining long-term steady shifts.

At issue is the concept of flexible scheduling, which Wal-Mart (Research) has been testing in a few of its stores over the past year, although the company says it hasn't tested that schedule in Pensacola.

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In an anonymous letter to CNNMoney.com, the Wal-Mart workers said such a "flip-flop open-availability" system would "create chaos and instability" in workers' lives.

"While working an ever-changing Wal-Mart schedule, how can one arrange day care for young children? The scheduling will make continuing education extremely difficult," the letter said.

However, industry experts say many retailers over the years have migrated to flexible hours scheduling because of its inherent benefits to both employees and customers.

The workers allege that the policy is designed to force higher-paid full-time workers to reduce their status to part-time, or quit (and be replaced with part-time workers), since this would save Wal-Mart "enormous amounts of money from reduced salaries and benefits paid."

Moreover, the letter claims that work schedules will be computer-generated based on each department's sales. Sales will determine the number of associates and hours assigned to each department, and the schedule associates work. The only set schedules are apparently for department managers and "stocking teams."

When asked by CNNMoney.com about the employees' letter, Wal-Mart spokesman Dan Fogleman said employees in Pensacola are not currently affected by the pilot tests. "The current staff scheduling system has been in place there for over 10 years."

He also denied that Wal-Mart was testing "open availability," in any of its stores. "We're definitely not testing open availability. We do solicit input from associates about when they are available. So if someone is taking a class, they can tell their manager about it and the schedule can be adjusted to accommodate them," he said.

However, the company is making changes at the Pensacola store so it will have more sales staff on evenings and weekends. "The reality of retail is that the busiest times are evenings and weekends in this market," Fogleman said. "We're trying to develop an optimal schedule that would best serve our customers. In order to ensure there are appropriate number of employees to serve those customers, we're asking associates that work daytime schedules to be more flexible."

Battling turnover trauma

As the nation's biggest private employer with 1.3 million workers, Wal-Mart suffers one of the highest worker turnover rates in the industry, said Burt Flickinger, managing director with retail consulting firm Strategic Resources Group, who cited his firm's own research.

Flickinger said Wal-Mart is cutting hours for full-time employees and looking to hire more part-time workers in a bid to trim both operating and healthcare costs - which can help the bottom line but can also cut the other way, since high turnover and lower staffing can mean lost sales, especially on busy weekends.

According to Wal-Mart executives, 75 percent of the company's workers in the United States are employed full time, although that number has been trending down gradually.

"For busy parents who stock up on baby food and other items, if they can't easily find it in Wal-Mart, they don't have time to go back. They'll just go to the competition," said Flickinger, noting that Saturday and Sunday account for about 40 percent of Wal-Mart sales each week. "It's critical for Wal-Mart stores to be fully stocked and have experienced staff on weekends," he said.

Wal-Mart spokesman Marty Heirs acknowledged the high turnover and said Wal-Mart was taking steps to address it.

"Most retailers have very high turnover rates, but we would like to keep our associates," Heirs said. "We're already doing a few things like reducing the waiting time for employees to qualify for health coverage. We're also increasing wage scales to compete with associates in markets where the wages are higher."

At Wal-Mart's media conferencelast week, Wal-Mart CEO Eduardo Castro-Wright was asked about the controversy surrounding the flexible scheduling policy .

He explained that Wal-Mart was trying to better match its customer traffic patterns with store staffing and that it was doing this "on a store by store basis." The idea is to make sure that stores are appropriately staffed during peak traffic periods such as late nights and on weekends, he explained.

"As we enhance [this policy], we're looking at when customers are in stores and when our associates prefer to work. Some associates can't work [flexible hours] so we will look at their preference." Castro-Wright said, adding that the company would tweak its pilot program before it rolled it out but declined to give a definite timetable.

Oddly, this sounds very similar to what Fogleman said the retailer is trying to achieve in Pensacola. When pressed for more specifics about how the pilot program differs from the system currently in place in Pensacola, Fogleman declined to offer further details.

Analysts weigh in

Retail industry watchers said Wal-Mart isn't exactly entering unchartered territory by exploring a flexible scheduling system. The concept has been rampant in retailing for years, said George Whalin, CEO of Retail Management Consultants.

"Generally retailers would like to have employees come to the store when they most need them. They want to staff stores when they are the busiest, like on weekends, near the holidays or when the weather is good or bad," Whalin said. Therein lies the cost-saving component of a flexible scheduling policy.

But he warned that the system works best when there's give and take between management and employees. "People have lives. It's not realistic to dictate to your employees what shifts they'll work," Whalin said. "This will simply lead to more turnover, which is one of the costliest issues facing retailers."

Daniel Butler, vice president of retail operations with the National Retail Federation (NRF), agreed with Whalin that evolving consumer lifestyles have impacted shopping patterns and that the burden is on retailers to adapt their staffing policies to meet customers' needs.

Said Butler, "Until the late 1970s and 80s, people shopped more on weekdays. Then with more two-income households, people were shopping more at night and on weekends. That changed the demand for full-time workers. Until the mid-90s the full-time, part-time ratio was 60-40. Now its more 40-60."

But regardless of the employees' status, retailers have to give workers a schedule that they can count on in order to retain them. "Mandating a flexible scheduling system for everybody doesn't make it work or work better," Butler said.

On the other hand, Butler said he disagreed with allegations that Wal-Mart may be trying to force full-time workers to part-time schedules to save on costs. "Retailers don't force full-time workers to part-time. They typically save money through attrition. It doesn't make sense to replace full-time staff with part timers when the whole point is to have more experienced staffing in stores to meet the nights and weekend demands."

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