09.26.13 9:45 AM ET
Companies Must Get Smarter About Hiring and Nurturing Part-Time Workers
A large portion of the U.S. workforce is now permanently working part-time. The expectation that an improving economy would ease millions of unhappy part-time workers back into full time jobs hasn't come to fruition. And with the agonizing slow rise in retail sales, it's unlikely to change anytime soon. How these part-time workers are recruited, trained, and motivated will have a decisive impact on the direction of our economy.
According to the latest figures from the Bureau of Labor Statistics, the number of people working part-time involuntarily—because their hours were cut or they can't find full-time jobs—is 7.9 million. That is up 75 percent from 4.5 million in August of 2007. And there are an additional 19 million workers voluntarily working part-time, for reasons ranging from other obligations (such as childcare, school, or health) to lifestyle choice.
The reasons behind this shift toward part-time work are debatable. In a recent paper, Federal Reserve Bank of San Francisco economists Rob Valletta and Leila Bengali, blame the still weak economy. It’s cyclical, they argue. John Silva, a former chief economist for the Senate Banking Committee, believes it reflects a structural shift in the economy. Others point to businesses cutting hours and full-time positions in anticipation of the Affordable Care Act. When the law takes effect next year, companies with more than 50 employees will have to provide healthcare for full-time workers.
Many wave all of these reasons aside and finger new technologies that allow firms to be more efficient in the use of staff. Some retailers, for example, now place sensors around their locations to determine where and what times of the day employees are needed - and adjust accordingly. My company has seen a big spike in employers using our hiring app requesting increased functionality—such as utilizing geo-location and push notification services—to better find part-time workers.
Of course, the incentive to reduce payroll is a constant. In the retail industry, payroll consumes between ten and 20 percent of total revenue. In food and hospitality, that proportion can rise to 30 percent. The advice that legendary Wal-Mart founder Sam Walton gave in his book, Made in America, still rings true today: "No matter how you slice it in the retail business, payroll is one of the most important parts of overhead, and overhead is one of the most crucial things you have to fight to maintain your profit margins."
Part-time workers do at face value cost less than full-time workers. And having two part-time workers do the job of one full-time worker would seem to eliminate the need to pay healthcare while giving companies more flexibility. But part-time workers also increase the risk of turnover, which can run from $3,000 to upwards of $25,000 per employee, depending on the industry. Less time spent at a company often means less of an affinity to a company, and the involuntary part-timers are naturally looking elsewhere for full-time jobs.
A poorly motivated worker matters. Anyone who interacts with customers—whether it's someone asking for directions in the store or processing a deposit in a bank—is the face of the company. A scowl or lack of knowledge undermines the brand, just as a smile and sensible direction creates loyalty and recommendations passed on to friends and family. And those at the starting rungs at companies are best placed to spot the little things—whether it's a dirty carpet or a moldy apple—that makes big differences.
So companies can’t simply regard part-time workers as a commodity. When recruiting, training, and motivating part time workers, companies need to focus on the characteristics that lend themselves to success. Part-time workers have less time to adjust to the job, so adaptability and quick learning skills are big pluses, for example.
Companies also need workers with the characteristics of loyalty and pride—which lowers the odds of high turnover and points to better performance—and need to keep them motivated. Top companies do this by providing them with full training, and including them in everything from staff meetings to social events. They also make it clear that if they perform well, there's room for growth, and the ability to move to a full-time position if desired.
Part time workers, just like full time workers, whatever their rank, have the potential to be great assets to companies. Many a C-Suite office is filled with someone who started out at the very bottom. Kat Cole, the chief executive officer of Cinnabon, started her career in high school as a part-time waitress at Hooters. That's an inspiring example, and both managers and workers learning that lesson will go a long way to determining the future health of the U.S. economy.