Hourly workers are a huge part of the U.S. economy. More than 60% of people in the country fall into this category. Some companies, particularly in industries such as food service and retail, have workforces with a far higher percentage of hourly workers.
Unfortunately, there is still a perception that hourly workers are not as important to the business as their salaried counterparts. Therefore, human resource departments don’t fully understand the dynamics of the hourly employee. Fortunately, some progressive companies have caught on to this importance, and from their research and policies, we can gain insight into what drives hourly workers, why they leave and what companies can do to retain them.
Here are some common myths associated with hourly workers, and why hiring managers need to tune them out if they want a successful company.
MYTH 1: Turnover is just part of hourly work.
TRUTH: Some companies have proved this myth to be false. Costco, for instance, turns over just 10% of their employees annually (and a miniscule 6% for employees at the company longer than a year). The Container Store also has turnover in the single digits. These companies have been able to retain employees due to their above-market pay and benefit packages, as well as their commitment to opportunity advancement and hiring-from-within.
MYTH 2: The applicants will come to us for hourly positions.
TRUTH: Think again. Many of the best candidates out there are already working (although that doesn’t mean to exclude highly capable unemployed candidates). In order to get the best quality talent, you have to recruit employees the same way that you would recruit customers. This means always taking a proactive approach and realize that recruiting is a 24/7/365 endeavor.
It is important to source your candidates from a wide-range of places. However, keep in mind that referrals tend to be the best source for applicants. Studies consistently show referral employees tend to stay at jobs longer and perform better than those who blindly apply to a company. Therefore, if you don’t have a job referral process at your office, you may want to consider starting one.
MYTH 3: Hourly workers have little impact on the bottom-line.
TRUTH: Hourly workers can make or break your business. This is true for all hourly workers – but especially for front-line staff that interacts with customers and clients. They are usually the first impression that customers and clients have of a business and can, with one conversation, make a lifelong business partnership, or ruin a company’s reputation.
Sound like a lot of pressure? You bet it is. Therefore, it is important to take the hiring process seriously, making sure to place the best people in appropriate positions. Don’t just hire bodies because you need them at a given time. Moreover, once employees are hired, they need proper training in order to provide the best customer experience.
MYTH 4: Turnover is OK, because the skill-level is low.
TRUTH: Turnover is costly at all levels of the organization. Although it is impossible to get an exact figure, researchers and human resource experts generally believe that replacing an hourly employee costs anywhere from 15% to 50% of their annual pay. These costs come in the form of advertising, sourcing new candidates, onboarding, and lower productivity as an employee’s work to get up to speed.
MYTH 5: When determining where to work, pay usually wins out.
TRUTH: Pay is important, but isn’t always the most important factor for hourly workers. Many employees care deeply about their opportunity for advancement in the organization – this is particularly true with non-teenage employees interested in making a career with the company. Proximity to work also plays a significant role. According to the Bureau of Labor Statistics, 80% of hourly workers work within 5 miles of their residence. That’s not a coincidence.
MYTH 6: Never hire anyone with a criminal record.
TRUTH: People with criminal records can often be just as successful as those with clean records. In 2012, Evolv, a data analytics company, measured call center performance of those with criminal records against those without. The results found that people with criminal records actually performed slightly better. And of course, there is tons of anecdotal evidence of people with less-than-perfect pasts that end up becoming stellar employees.
Of course, we don’t believe companies should turn a blind eye to all criminal offenses. But taking a hard stance against anyone with a record may turn into a missed opportunity.
In short, don’t rely on your current assumptions regarding hourly employees when looking to grow your business – you might miss out on fantastic workers.
Have more to share about hourly workers and their importance to companies? Feel free to add your thoughts in the comments.