As a leading online pet retailer, Chewy has experienced massive growth since its founding in 2011. The company now boasts over 20,000 employees, 18 fulfillment centers, and net sales of $8.9 billion in 2021, up 24% year-over-year.[^1] But keeping pace with ever-increasing demand means Chewy relies heavily on its frontline workforce to show up consistently and on time, with little margin for error.
Enter Chewy‘s notoriously strict attendance policy. While the specifics have evolved over the years, the core principle remains the same: near-perfect attendance is not just expected but required for continued employment. Even one or two instances of tardiness or unexcused absence can be grounds for termination.
Attendance by the Numbers
So just how strict is Chewy‘s policy compared to other companies? Let‘s look at some benchmarks:
| Metric | Chewy | All Industries Average |
|---|---|---|
| Absences allowed before discipline | 1-2 | 5-6 |
| Tardies allowed before discipline | 1-3 | 4-5 |
| Paid time off for hourly workers | 0-40 hours | 10 days |
Sources: U.S. Bureau of Labor Statistics, Society for Human Resource Management[^2]
As you can see, Chewy falls far below national averages in terms of attendance leniency and paid leave. And while there are certainly other companies with rigid policies, Chewy stands out for how swiftly and consistently discipline is enforced.
The Letter of the Law
Of course, employers cannot set attendance policies that violate workers‘ legal rights. Under the Family and Medical Leave Act (FMLA), eligible employees must be allowed up to 12 weeks of unpaid, job-protected leave for certain medical and family reasons.[^3] The Americans with Disabilities Act (ADA) requires reasonable accommodations for workers with disabilities, which may include modified attendance policies in some cases.[^4] And the Occupational Safety and Health Administration (OSHA) prohibits retaliation against employees for reporting illnesses or injuries.[^5]
However, these laws only provide baseline protections and still leave considerable room for employer discretion. Many Chewy workers have reported difficulty getting FMLA leave approved and some have even been disciplined for absences related to hospitalization or surgery. The company does offer accommodations through its "Chewy Cares" program, but the process is not always straightforward or timely.
The Business Case for Being Strict
So why does Chewy take such a hard line on attendance? The company faces unique supply chain and customer service challenges as an e-commerce provider of pet food, treats, and other essentials:
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Order volumes fluctuate heavily based on sales and promotions. Chewy‘s net sales have grown at a compound annual rate of over 40% in the last five years.[^1] The company experiences massive spikes around events like Black Friday, Cyber Monday, and Prime Day as well as brand-specific promotions. For example, during the first Chewy Health sale in August 2022, sales of pet supplements increased over 80% week-over-week.[^6]
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Customers expect fast, accurate fulfillment and responsive service. Pet owners rely on Chewy for convenient recurring deliveries of food, medication, and other necessities. The company has built its reputation on reliability, with 70% of sales coming from Autoship subscriptions.[^1] Delays or errors due to short-staffing can quickly escalate into angry calls and chats that overwhelm customer service.
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The labor market for hourly workers is extremely competitive. Despite Chewy‘s strict policies, the company pays above average wages for its industry and offers generous benefits including health insurance, paid parental leave, and tuition reimbursement. In 2022, Chewy raised starting pay to $15-19 per hour and provided $120 million in incremental compensation to hourly workers.[^7] Annual turnover in warehousing and customer service can top 100%[^8], so Chewy has to be selective to maintain standards.
In this context, leaders at Chewy seem to have determined that a zero-tolerance approach to absenteeism is necessary to protect the company‘s performance and brand while hedging against unpredictable staffing needs. By setting clear expectations and swiftly removing workers who don‘t comply, they aim to maximize productivity, minimize costs, and deliver the level of service Chewy is known for.
The Downsides of Being Too Strict
However, many experts argue that overly punitive attendance policies can backfire in the long run:
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Reduced morale and engagement. Employees who feel they can‘t take needed time off without facing severe consequences are more likely to be stressed, burnt out, and resentful at work. A recent survey found that nearly half of workers have come into the office sick due to strict attendance policies.[^9]
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Higher turnover and training costs. By some estimates, the total cost of losing an hourly employee can range from 16% to 213% of their annual salary.[^10] Even in a high-churn industry, constantly having to hire and train new workers is far more expensive than accommodating occasional absences. Plus, experienced employees tend to be more knowledgeable and productive.
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Decreased diversity and inclusion. An inflexible "points" system that treats all tardies and absences as equal can have a disproportionate impact on employees with disabilities, health issues, family care obligations, and unreliable transportation. This can limit the talent pool and send the message that the company only values a narrow profile of workers.
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Damaged reputation and customer experience. In an age of online reviews and social media, word quickly gets around about companies with overly strict policies. Chewy‘s own careers page is filled with complaints from employees and job seekers about the attendance policy. Customers may also feel the effects in terms of inconsistent service and difficulty getting issues resolved.
As Walmart CEO Doug McMillan has said: "When you take care of your associates, good things happen. Associates are more satisfied. Retention goes up, turnover goes down. We see that in the numbers."[^11]
Finding a Balance
So what‘s the solution? While some level of attendance policy is necessary for any large employer, there may be room for Chewy to adjust its approach without sacrificing business results. Potential ideas include:
- Setting clearer thresholds for tardiness (e.g. 5-7 minutes vs. 1-2 minutes)
- Allowing a set number of "free pass" days per year or quarter
- Providing positive incentives like quarterly bonuses or extra paid time off for good attendance
- Improving communication and flexibility for employees who proactively report absences
- Creating "hardship funds" to assist employees with transportation, childcare, or medical costs
- Regularly surveying employees on their satisfaction with time off and attendance policies
Striking the right balance between lenience and responsibility is an ongoing challenge for Chewy and many other companies in today‘s complex world of work. But by listening to employees, analyzing data, and being open to change, retail leaders can design attendance strategies that protect the bottom line while promoting a healthy, engaged workforce.
[^1]: Chewy Fiscal Year 2021 Annual Report[^2]: U.S. Bureau of Labor Statistics Employee Benefits Survey, 2021
[^3]: U.S. Department of Labor FMLA Compliance Guide
[^4]: U.S. Equal Employment Opportunity Commission ADA Primer for Small Business
[^5]: Occupational Safety and Health Administration Whistleblower Protection Rights
[^6]: Chewy Press Release, "Chewy Celebrates Holistic Pet Health With New Chewy Health Feature," August 18, 2022
[^7]: Chewy Press Release, "Chewy Announces Fourth Quarter and Full Year 2022 Financial Results," March 29, 2023
[^8]: Johnson, Sydney. "Sky-High Turnover Rates in Retail and Hospitality." Adecco Staffing Blog, May 21, 2022
[^9]: Workforce Institute at UKG, "Closing the Gaps in Employee and Manager Relationships." September 7, 2022
[^10]: Boushey, Heather and Glynn, Sarah Jane. "There Are Significant Business Costs to Replacing Employees." Center for American Progress Report, November 16, 2012
[^11]: Sozzi, Brian. "Walmart CEO: ‘When you take care of your associates, good things happen.‘" Yahoo! Finance, June 4, 2021
