Small Business Digest Header Icon   •    •    •    •    •    •    •  
Small Business Digest


Helping the Bottom Line by Retaining Hourly Workers

In 2007, 31 million Americans quit their jobs, according to the Bureau of Labor Statistics.  And while today’s labor market certainly is tighter than last year, this reflects 23 percent of the workforce who recently left their positions for greener pastures, moves that cost employers time and money. 

And even within the hourly workforce, turnover comes at a significant expense to employers.  In fact, research from the Work Institute found that hourly employers spend an average of $8,500 to replace an employee.  Hiring managers tell me that they experience costs associated with recruiting and training a new employee, as well overtime costs until a replacement is found. 

In a time when companies are all watching their bottom line, managers need to look at whether their company is doing everything it can to help ensure that current employees remain onboard.

Beware: Warning signs of wavering employees

The saying “ignorance is bliss” just doesn’t hold true when it comes to managing an hourly workforce.  Managers who do not maintain ongoing relationships with their hourly employees risk being caught off guard when an employee gives his notice.  However, if they can recognize warning signs some employees demonstrate when they are frustrated or considering leaving, managers may be able to intervene before it’s too late.  Be on the lookout for:

1)  Attitude changes: Most workers aren’t very good at putting on an act.  If they’re thinking of leaving a position, they mentally start to disengage even before they’re actively looking for another job.  Someone who used to go the extra mile becomes more of an average employee – or gets through their shift doing the bare minimum required.  Suddenly, they’re five to 10 minutes late for their shift and taking a longer lunch. 

2)  Avoidance: Workers who are thinking of leaving often decide to lay low.  For fear of admitting that they’d prefer another job, they avoid taking breaks with co-workers, and your “chatty Cathy” is suddenly mum.  And, you may find that they avoid management even more so.  

3)  Something just doesn’t feel right: And sometimes, it’s a combination of clues that indicate a worker is disgruntled.  Managers may notice a trend of complaining more, both to colleagues and to management.  And maybe some recent absences seem suspicious: In the back of the manager's mind, she's wondering, “Is he really sick?”

Keeping the current workforce

Of course, the better scenario is to proactively create a working environment that reduces hourly turnover rate.  Some of the best practices include:

1)  Offering competitive pay/benefits: In a survey commissioned of hourly workers who indicated they were likely to change jobs in 2008, 72 percent said they would forgo job satisfaction in favor of better pay.  And, 49 percent also said that they would rank better benefits above job satisfaction.  Both of these stats speak to the importance that hourly workers place on pay and benefits.  Companies who wish to retain their hourly workers must be aware of local offerings from similar employers and be prudent about increasing their compensation and benefits so that a better offer cannot be found just down the road.  On the benefits side, the most competitive hourly employers offer access to healthcare coverage, a 401k, tuition assistance, paid time off and a generous employee discount. 

2)  Rewarding the staff: Even if the company can’t provide staff a raise right now, they may be able to offer other incentives.  Consider offering an extra paid vacation day, gift certificates, increased company discounts, etc.  And while workers appreciate these small expressions of “thank you,” verbal or written praise should not be overlooked.  If it’s said sincerely, positive feedback makes employees feel good – and needed.  Plus, managers should publically acknowledge stand-out employees for exceeding sales goals or other incentive programs on a daily, weekly or monthly basis.  Rewards can again include gift certificates and company discounts.   

3) Taking care of the company’s culture: While hourly workers are indeed motivated by their paycheck, remember that it isn’t everything.  In a survey commissioned of hourly workers ages 18-29, nearly one-third (30%) said the best thing about their job is their co-workers.  (Pay, official benefits and interaction with customers were in a virtual three-way-tie for second place.)  Given the importance that hourly workers place on their co-workers, take the time to understand the traits/personalities of employees who thrive at in the company's environment so that the next hires will fit in well.  Consider doing team interviews so that applicants and current employees have a chance to meet before a hire is made.  Plus, provide employees the opportunity to refer applicants.  They are likely to refer applicants with similar capabilities and interests.   

Adapted from article by Shawn Boyer, CEO of

© 2018, Information Strategies, Inc.
P.O. Box 315, Ridgefield, NJ 07657