Management Accounting Section Midyear Meeting

Reliance on Part-Time Labor and Operating Efficiency

• In Event: Labor Force Management

Abstract

Prior research (Kesavan et al. 2014) documents that a reliance on a higher proportion of part-time workers (compared to full-time workers) in the retail industry affords greater volume flexibility to a firm in adapting to changing economic conditions, resulting in improved firm performance. However, in employing more part-time workers, firms must trade-off greater costs associated with coordinating a larger workforce. As a result, we argue that the association of part-time labor with operating efficiency will depend on the trade-offs between the relative costs and benefits of part-time labor which can vary in different settings and industries. In the first part of our empirical analysis, we examine the average effects of a higher reliance on part-time workers on firm-level operating efficiency across multiple industries and contrary to Kesavan et al. (2014) find a negative association between the proportion of part-time workers and operating efficiency. In subsequent hypotheses and tests, we look at cross-sectional variation in the relative costs and benefits of employing part-time labor. These tests help shed light on the trade-offs involved, which can impact the effect of part-time labor on operating efficiency in different settings.

Authors

• Joanna Golden, University of Memphis

• Raj Mashruwala, University of Calgary

• Mikhail Pevzner, University of Baltimore