10 Tips for Retaining Hourly Workers

Hourly employees can be vital contributors to success. Hiring the right people is a critical challenge. Retaining those valuable team members can be even more difficult, especially in industries relying heavily on hourly workers.  

High employee turnover rates can be costly, impacting productivity, team morale, and the customer service quality. One estimate indicates it takes 41 days and over $4,000 to add one new employee. Those resources could be better used elsewhere, such as investing in your existing team. 

The Cost of Turnover 

The costs associated with making a replacement hire stem from recruiting, interviewing, training, and the loss of productivity during an understaffed transition period.

Beyond the financial strain, frequent departures create an environment of uncertainty, negatively affecting morale among remaining staff members. Increasing employee retention by even a small percentage can significantly increase profits. 

Ten ways you can invest in your hourly workforce 

1. Offer Competitive Pay & Benefits 

While not the only factor, competitive compensation is foundational for attracting and retaining hourly workers. According to one study, 55% of people prioritize compensation, and 40% of people believe they are underpaid. Many large organizations have increased starting pay or their internal minimum wage to address retention challenges.

A 2017 Harvard Business Review study found that a 10% increase in base income correlates to a 1.5% rise in the likelihood that a worker will stay with their current employer. But before you break the bank, it's beneficial to examine the average base compensation for comparable positions in similar companies within your local labor market. 

Beyond wages, offering benefits previously reserved for salaried employees is becoming increasingly important. Consider providing health benefits, retirement account contributions, disability and life insurance, student loan assistance, or tuition reimbursement. Offering health benefits, in particular, can increase employee satisfaction as they know they will be taken care of if they or their family get sick. 

2. Prioritize Flexible Scheduling & Work-Life Balance 

Flexible scheduling has moved from a 'nice-to-have' perk to a requirement for many hourly employees. Hourly workers often juggle multiple responsibilities outside of work, such as education or family commitments.

Offering flexible options, like adjusting start/end times, split shifts, or allowing employees to give input on their schedules, shows you value their well-being and can significantly increase job satisfaction and loyalty. Over 80% of hourly workers consider the ability to influence their work schedule extremely important for job satisfaction.  

3. Invest in Training and Development 

Hourly workers are often open to opportunities to advance their careers, potentially becoming salaried employees. Providing opportunities for growth and advancement is a powerful way to improve hourly employee retention. When employees see a chance to develop their skills and progress, they are more likely to stay. This can include offering training programs, workshops, online courses, or mentoring sessions.

By investing in their professional development, you demonstrate a commitment to their success and enhance their skills and confidence. Promoting from within also saves time and money on external recruitment. 

Investing in skill development also helps boost the skill set and efficiency of your business. This is particularly relevant in today's dynamic market, where skills are rapidly evolving, especially with the rise of AI. Candidates with an understanding of how AI tools work and how they can enhance productivity will be highly valuable. Continuous learning is important for employees to navigate change effectively. 

4. Recognize and Reward Contributions 

Showing appreciation for your employees' work is essential. Recognizing and rewarding contributions makes employees feel valued, which increases their likelihood of staying. This can involve formal programs like employee of the month or quarterly awards, or simple shout-outs during team meetings. Tangible rewards such as gift cards, bonuses, or extra time off can also boost morale and loyalty.

Personalizing rewards based on individual preferences ensures each employee feels seen and valued. Regular recognition, even every few months, fosters motivation and encourages workers to stay on board longer. Utilizing HR tracking software can be valuable for acknowledging exceptionally loyal employees and streamlining the communication and follow-through on reward programs. 

5. Foster a Positive and Inclusive Work Culture 

Creating a healthy and supportive company culture where everyone feels valued, respected, and included is crucial for retention. Encourage open communication, promote teamwork, organize team-building activities, celebrate differences, and provide opportunities for personal growth. A positive culture where employees genuinely like coming to work and enjoy their coworkers makes them more likely to invest in your success. 

6. Improve Communication and Listen to Feedback 

Inadequate communication is a primary driver of employee turnover. In fact, one study showed that 61% of employees considered quitting a position because of poor communication. Instead, clear and transparent communication can set the stage for a positive employee experience from day one.

Clearly communicating job responsibilities, expectations, and performance metrics during interviews and onboarding is vital. Regularly checking in with new hires addresses questions and concerns early. Try establishing open communication channels, such as team meetings, anonymous surveys, or easily accessible places for feedback, to show employees they are heard and valued. 

7. Empower Employees and Involve them 

When employees feel they have a say in the direction of the company or input on their jobs, it fosters a sense of ownership and commitment. Giving hourly workers some level of decision-making authority can lead to increased feelings of empowerment and engagement. Actively seek input on workplace policies, procedures, or improvements, and when good ideas emerge follow through (and credit them!). 

8. Start with the Right Hire 

The best place to start retaining workers is before they are even hired. Hiring individuals who align with your company's culture is crucial for long-term retention. Cultural fit goes beyond just skills and experience; it involves shared values, attitudes, and work ethic. During the hiring process, focus on assessing candidates' compatibility with your organization's values and team dynamics.

The vast amount of information required to make a great hire - like skills assessments, interview notes, and more - can be a management nightmare. Future Systems offers HR Solutions that provide a single space to keep track of all employee information, including new applicants, helping to streamline the hiring process. 

9. Ensure a Strong Onboarding Experience 

A well-structured onboarding experience makes new hires feel supported and engaged from day one. Providing comprehensive training materials, assigning mentors, and ensuring they have the necessary tools helps them succeed. Unfortunately, many companies don’t do a good job of onboarding.

Organizations with a strong onboarding process improve new hire retention by 82% and productivity by over 70%. Onboarding should begin as soon as a candidate accepts the position.  

10. Utilize Technology to Streamline Operations 

Leveraging technology can significantly enhance your ability to retain hourly workers by streamlining processes, improving communication, and offering modern solutions. Digital scheduling and time tracking eliminate tedious manual tasks for both managers and employees, leading to smoother operations and freeing up time for more valuable activities. Giving employees access to technology tools to influence their schedule and training managers to use these tools to communicate schedule changes and decisions transparently is crucial. 

Future Systems provides Timekeeping & Scheduling solutions that offer convenient tools, including online, app-based, and biometric time clocks, as well as PTO requests and accrual. These systems are customizable and easy to use from anywhere, anytime. By automating mundane tasks like timekeeping, you save time and money, helping your business thrive. 

They might be “hourly” employees, but to retain them, they need to be treated like more than a number. Finding effective strategies for retaining hourly employees requires recognizing them as valuable individuals who seek respect, fair compensation, and opportunities for growth, creating an environment where employees feel valued, motivated, and engaged. This leads to reduced turnover, a more stable team, and a thriving business. 

Ready to streamline your HR operations and focus more on retaining your valuable hourly staff? Please give us a call or fill out our contact form and a member of our friendly team will be in touch. We’re ready to help you today!