Are Your Casuals Bad For Business?

As manager of a retail store many years ago, I started employing temporary and casual workers to fill in for absent employees. The trend caught on and soon my organization, global travel retailer Flight Centre, was employing ‘temps’ across the globe. The practice became so entrenched that one enterprising employee even started her own temp agency, specifically supplying casual travel agents to the company.

Yet it wasn’t till a few years later that we identified an inherent problem with this approach. After analyzing the sales figures, very few casuals equalled the productivity of even our most unskilled full-time novice. We were getting ‘bums on seats’ but not even a third of the value of the employee being replaced.

This was the first time I’d really thought about how a worker’s status could impact outcomes. Of concern, Australia has one of the highest casualized labour forces in the world at 25% according to the OECD Outlook Employment 2019 report. The deregulation of the labour market in the late eighties, plus a desire by employers to hire employees who can be shed quickly to reduce their costs and obligations, means casualization has become the norm for many occupations such as hospitality (79%), food prep (75%) and farm workers (55%).

Unfortunately for these industries, research shows how casual employment can have a?negative impact on productivity (Ortega and Marchante 2010; Cappellari 2012; Lisi & Malo 2013; Kleinknecht 2014). Casual workers are often less engaged, take less responsibility and have lower morale than non-casual workers; not surprising when more than half lack any kind of guaranteed shifts/hours. The Household, Income and Labour Dynamics in Australia (HILDA) survey also shows that casual workers were almost twice as likely as permanent workers to have looked for another job in the previous four weeks—26 per cent and 14 per cent respectively. This doesn’t bode well for employers during the current global labour shortage.

Armed with these statistics, how can you structure your workforce to get the best results? Well, you could follow Sam’s example. As manager of a boutique hotel in Sydney’s Potts Point, he employed the equivalent of fourteen full-time-equivalents as casual staff to work in housekeeping, reception and so on. Forced to consolidate during the COVID pandemic he decided to convert his casuals into nine full-time permanents and was shocked at the difference.

Not only did they effortlessly cover the functions of the previous larger workforce, but they did it seamlessly, multi-tasking from housekeeping to manning the front desk and so on. Suddenly they were part of a team, had a steady, reliable income and were no longer treated as just labour hire add-ons. Cohesiveness led to reduced levels of conflict and absenteeism. Even better, employing permanents in an industry where casuals were the norm made Sam’s hotel employment offering stand out like a beacon in the marketplace, attracting better recruits and increasing his employee retention levels. In this case, switching from casual to permanent has been vital to the hotel’s ongoing productivity and profit.

But what about industries that have to rely on casuals? Matt Coorey, owner of the Boardwalk Tavern employs 50 casuals, many of whom are school and university students. To keep them engaged he has created a skills training pathway linked to different levels of pay, plus they all participate in the bi-monthly social events such as MasterChef or Curry Nights. They also share additional responsibilities, such as the casual doing his Engineering PhD who is now Captain of Maintenance and has revolutionized repair breakdown times. As Matt says, ‘Whether someone works one day or five days a week they’re still part of the team’.?

Hayley Cooper who runs manufacturing company Harnex offers her casuals tailor-made shift times, free breakfasts, use of the communal pantry, and fortnightly BBQs, all of which have increased productivity and staff retention. As she says, ‘I don’t even know who is a casual in my business.’ Both businesses found that this focus on inclusion translated to more casuals referring friends and family, increasing their hiring success as well.

The message: if you have to rely on casuals, treat them well. Give them certainty of income and inspire and engage them the way you do the rest of your people. This often requires an organizational reset in language and thinking. It can be an uphill battle teaching operational staff with entrenched beliefs that no one is ‘just a casual’. The latest research that shows 42% became more engaged simply by ‘the employer showing an interest in them’ may be a helpful place to start. Upskilling may also be required for disorganized supervisors who treat casual staff like cannon fodder, constantly asking them to change shifts at short notice and then getting mad when they don’t comply. Encouraging leaders to have monthly chats with their casuals and include them in social events and rewards programs is the next step.

And if you don’t do any of this? As Homer Simpson counsels his daughter: ‘Lisa, if you don’t like your job you don’t strike. You just go in every day and do it half-assed.’ If you want your business to thrive, don’t be casual with your casuals.

Mandy Johnson is a best-selling author, researcher and advisor and has ‘in-the-trenches’ experience as a start-up founder and director of global travel retailer Flight Centre’s UK operation, opening a store a month. One of only a handful of Australians to present at the Asia/Pacific Talent Conference in Taipei, Mandy has been interviewed for her innovative business ideas on Sky Business News, ABC Radio’s Conversation Hour, Qantas Radio and many others. She is also the founder of Australia’s first People & Culture Accelerator Program – a 5 month interactive face-to-face course creating?world-class ‘people’ experts who solve business challenges, build remarkable workplaces and achieve extraordinary results.(www.pcaps.com.au)