Strategies for Engaging and Retaining Your Hourly Employees

August 30, 2022
Strategies for Engaging and Retaining Your Hourly Employees
In 2021, hourly employees accounted for 55.8% of all wage and salary workers in the United States. Besides representing the largest portion of the U.S. labor force, hourly employees are susceptible to burnout and disengagement at work — which can lead to turnover. While salaried employees are vulnerable to burnout and disengagement as well, many are spared by their employer’s engagement efforts. In most cases, salaried employees hold higher positions than hourly employees, and therefore receive greater compensation. Consequently, an employer might focus their engagement initiatives on salaried employees while disregarding hourly employees. This is normally not done with nefarious intent. Instead, it stems from the notion that hourly employees are easier to replace than salaried workers. There is some truth to this, because key positions are typically held by salaried employees. That said, when a productive hourly employee becomes disengaged or suddenly quits, it can adversely impact the organization.

Why employers should engage their hourly employees

The Great Resignation is still underway According to a global survey by PricewaterhouseCoopers, “One in five workers plan to quit their jobs in 2022.” While most are seeking higher pay, many are looking for more fulfillment in the workplace. Note that lack of fulfillment is one of the main causes of disengagement. Talent scarcity, and higher talent acquisition costs In a 2022 Randstad survey, more than 1/3 of employers globally report experiencing increased talent acquisition costs. Moreover, “25% report a negative impact on their company’s bottom line due to talent scarcity alone.” Soaring turnover rate in the retail industry Total Retail says that “The turnover rate in the retail industry is slightly above 60 percent.” This is based on research conducted by the National Retail Federation. This data is critical, because hourly workers are heavily concentrated in the retail industry. Hourly employee burnout is prevalent reports that “Burned out employees are now commonplace in industries requiring an hourly workforce … Promoting worker engagement can be the difference between burned out workers on the verge of quitting and satisfied employees.” It is not cheap to replace an hourly employee Replacing a minimum-wage hourly employee can cost an estimated $1,500 — and that’s on the very lowest end. Other estimates put the cost of replacing an hourly employee at $3,500 to $10,000. These replacement costs include:
  • Lost productivity
  • Overtime
  • Recruitment
  • Background checks
  • Training
  • Other measurable expenses
The costs do not include indirect losses, such as:
  • Decline in customer satisfaction
  • Potential loss of customers
  • Lost revenue
  • Overburdening remaining staff
  • Reduced morale
  • Poor reputation due to turnover and the need to hire new people
Obviously, employers have much to lose when hourly employees are not engaged at work. Next are strategies to strengthen engagement and retention among your hourly people.

Offer more predictability to workers when possible

Whereas a salaried-exempt employee can typically expect to work the same schedule from week to week, things might not be so predictable for an hourly employee. For example, they may be called upon to suddenly work overtime, which can throw a wrench into their personal plans. Also, too much overtime can spur burnout. Even if they are not required to work overtime, their regular work shifts can frequently switch — such as during busy, slow, or seasonal periods. Not knowing when their shifts will change can make it difficult for them to achieve any semblance of work-life balance.
It’s important to provide as much predictability for workers as possible.
Granted, in some industries, it’s hard to ensure predictable hours and wages, especially for tipped employees. Nonetheless, it’s important to provide as much predictability as possible. Note that depending on where your employees work, you may not have a choice. Some jurisdictions have predictive schedule laws that require certain employers to give hourly or minimum-wage employees their work schedules in advance. What’s more, some states require advance notice of pay rate changes.

Determine other factors driving disengagement and turnover

Employees become disengaged and leave their jobs for various reasons, some of which might be outside of the employer’s control (e.g., family or health problems). Oftentimes, however, the reasons stem from employer deficiencies that could have been prevented. Before you implement preventative or mitigation measures, try to determine why your hourly employees left or what can cause them to leave. For example, manufacturing and warehouse employees often leave their jobs for these reasons:
  • Unchallenging/boring work
  • Dangerous, fast-paced, or heavy work
  • Low pay, with no pay increase
  • Insufficient training
  • Lack of advancement
  • Safety risks or exposure to hazardous materials
  • Unpleasant work environment (e.g., unclean, cold, or noisy)
  • Conflict with leaders (e.g., feeling disrespected by leaders)
  • Inadequate breaks
  • Unhealthy (or lack of) company culture
  • Not enough flexibility
  • Too much overtime required
  • Stringent company policies
Another report says hourly employees become burned out for the following reasons:
  • Routine/monotonous work
  • Boredom
  • Feeling undervalued
  • Low pay
  • Excluded from decision-making processes
  • Not aligned with the company’s vision

Identify strategies for engagement and retention

After you figure out what can cause your employees to become disengaged, you’ll need to create strategies for combating those triggers. For example, if your employees are disengaged because of too much overtime, see if your overtime requirements are unreasonable. If so, find a middle ground that allows you to meet your business needs without overworking the employee. Additional solutions for engaging hourly employees:
  • Provide new ways to accomplish certain tasks to break the monotony.
  • Offer cross-training opportunities. Cross-training can make employees feel more valued, plus indicates that you’re willing to invest in their professional growth.
  • Be more attentive to your hourly employees’ needs, such as those regarding childcare and transportation. If you cannot afford these extra benefits, consider pointing your employees to community or national resources that might be able to help.
  • Clearly explain your company vision to your hourly employees. Show them where and how they fit in.
  • Obtain your hourly employees' input when making certain decisions that directly affect them, such as those that impact their work and compensation.
  • Encourage your hourly employees to share their ideas on assigned projects, departmental initiatives, and anything that can help the organization achieve its mission.
  • Conduct engagement surveys to determine what motivates your hourly employees.
  • Involve your hourly employees in organizational activities and invite them to social events. Create an inclusive workplace so they feel a sense of belonging.
  • Provide competitive wages and benefits. In terms of benefits, at the very least, try to offer health insurance, a retirement plan, and paid time off. Keep in mind applicable mandatory benefits, as well.
  • Support your hourly employees by urging them to take breaks and time off from work to avoid burnout.
  • Promote a respectful work environment. Salaried employees should treat hourly employees with respect, and vice versa.

Digitally elevate your scheduling and communication processes

Effective scheduling and communication are vital to managing hourly employees. But without efficient tools, the following headaches can occur:
  • Understaffing
  • Incompatible shift assignments
  • Misalignment between business needs and employees’ shift preferences
  • Slow communication or miscommunication between management and hourly employees
  • Disengaged employees
A thoughtfully built employee time tracking platform can boost scheduling and communication in the following ways:
  • Automates employee time tracking
  • Enables clocking in and out from anywhere
  • Integrates with HR, benefits, and payroll
  • Creates and edits shifts for all employees
  • Informs employees of new schedules created
  • Develops schedules around roles or time
  • Tracks employee activity in real time
  • Manages PTO requests
  • Provides resources for improving employee engagement, including surveys
Advanced scheduling platforms come with reporting and analytics features plus built-in compliance to help you adhere to scheduling and hourly employee laws.

This communication is for informational purposes only; it is not legal, tax or accounting advice; and is not an offer to sell, buy or procure insurance.

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