The Value of Training Part-time Employees

A recent report in the Wall Street Journal found that at least some companies that traditionally hired high numbers of part-time workers, including retailers and fast-food outlets, are focusing on full-time hires instead. Bucking broader hiring trends that continue to see more part-time, temporary and contingent workers across sectors nationwide, these companies are reassessing the value of full-time hires. The turn about is based on two major factors. First, there is strong reason to conclude that despite the additional costs associated with full-time hires, tipping the balance from part-time to full-time workers can save money, especially in terms of training cost. Second, there is a growing body of evidence to support the conclusion that full-time workers lead to higher levels of customer satisfaction and as a result, higher profit margins. But is work status actually the problem, or can more effective management and training of part-time employees yield the same gains?

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Crunching the Numbers: The Benefits of Hiring Full-time Workers

Full-time employees are frequently considered less attractive to employers, especially in high-churn industries, such as retail and service, because full-time employees invariably cost more than part-time employees. Health benefits, sick leave and vacation time, after all, can add up, even in industries where workers’ annual salaries are well below national averages. Nevertheless, there is also strong evidence that hiring more full-time employees can save money, especially over time. Consider the following examples from the WSJ report:

  • At Buffalo Wings & Rings, a restaurant with about 50 locations nationwide., full-timers report 6% higher sales per hour on average than part-time employees and miss work less often. For this reason, since 2013, the eatery has more than doubled its full-time employees. The upshot? In addition to higher sales, the eatery has reduced its training cost by 25%.
  • At Sheetz, a beauty retailer, less than a quarter of the company’s full-time staff leave each year compared to 83% of part-time employees. Again, shifting the balance from part-time to full-time employees stands to save the company millions of dollars per year in training dollars while also increasing sales. Sheetz also reports that full-time staff tend to be more committed, demonstrate higher levels of customer service and report higher levels of sales.

Training: A Key Variable in the Part-time versus Full-time Employee Decision

The above numbers are compelling, and there is no question that switching from part-time to full-time employees nearly always means reducing one’s training costs and increasingly one’s worker retention. This is good for business and generally, it is good for employees. But there is also good reason to avoid hasty conclusions here.

Despite compelling data that suggests full-time workers are a better return on investment, there is no reason to assume that effective training of part-time employees cannot also result in outstanding customer service, higher sales, lower employee attrition and ultimately higher profits.

On this account, Starbucks stands as a great example. First, at Starbucks, part-time employees who work more than 240 hours over 3 months are already eligible for nearly all the same benefits as the company’s full-time employees. This means that the additional costs associated with full-time employees is not necessarily an issue for the company. Second, the company has developed a strong reputation not only for training employees and creating employee incentives to help drive sales but also for cross-training employees.  This means that part-time and full-time employees alike benefit from opportunities to acquire new skills and move into more challenging positions in the company’s retail operation and even corporate operation over time. Their recent partnership with Arizona State University, which enables part-time and full-time employees to complete a university degree online, is one of the ways the company is supporting employee training and education on a long-term basis.

Starbucks’ onboarding process and ongoing training and education initiatives for part-time and full-time employees alike are expensive but still yield a high ROI.

On Glassdoor, close to 10,000 reviews of Starbucks reveal that 90% of employees approve of the company’s senior management and 78% would recommend the company to a friend. This is notably much higher than the approval ratings for any of Starbucks’ closest competitors, including Dunkin’ Donuts.  Also, Starbucks profits continue to soar. What does this suggest? The problem may not in fact be part-time employees but how part-time employees are treated.  In fact, while many of Starbuck’s competitors report employee turnover rates up to 350%, Starbucks employee churn is under 100%–a fraction of the industry’s average–and this is with its ongoing commitment to part-time employee hiring and training.

While not every company has the resources to replicate Starbucks’ example, the company’s ongoing success and ability to train, retain and achieve high sales and profits with part-time and full-time employee alike does suggest the problem may not be the type of hire but rather the type of initial and long-term training that many company’s choose to give (or not give) to their part-time employees.

While Starbucks requires part-time and full-time employees to undergo the same training and ensures part-timers can also benefit from ongoing training and education opportunities, most company’s continue to adopt a two-tiered approach to training–one that generally leaves part-time employees on the sidelines.

 

May 1, 2016   Updated :November 16, 2016   employee training, part-time, training   

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