Increased Demand and Rising Wages Make Hourly Work More Appealing

Mar 4, 2022
Increased Demand and Rising Wages Make Hourly Work More Appealing

While full-time, salaried positions have often held more appeal and status than hourly work for a lot of Americans, many of the displaced workers reentering the workforce are taking a second look at hourly employment, either as a way to bridge the time between jobs (or careers) they left during the pandemic, or to attain the flexibility and time-management perks that they have become accustomed to over the last year. Data from the last few months have shown a rise in workers’ wages in a wide variety of private sector jobs.

Hourly workers see raises

Many of the positions benefiting from wage increases right now are in industries that rely heavily on hourly workers. According to estimates, more than half of U.S. workforce worked hourly or low-wage jobs prior to the pandemic. Many hourly workers had to leave their jobs in 2020 and 2021, but they are back in high demand right now, and they have more leverage regarding pay than ever before.

Remain cognizant of employee satisfaction to reduce turnover

The main disadvantage to relying too heavily on hourly workers is the high turnover rate. Companies are struggling to retain workers in our current environment of high inflation and ongoing public health concerns. Employers who want to attract and retain dependable hourly workers need to accommodate not only rising wage standards, but also workers’ growing demand for better, safer working conditions and growth opportunities within a company.

Overhiring can exacerbate turnover

While the pay for hourly work is going up and job openings are abundant, worker disappointment with wages can be quickly replaced by disappointment regarding hours scheduled. While retail and food service businesses might want to compensate for expected turnover by hiring extra people, employers should remain aware that too inflexible or light of a schedule for workers might actually increase turnover, rather than reduce it. Some hourly employees will appreciate light schedules because of other jobs or other commitments, but those employees who support themselves (and family) on hourly wages will seek only a full-time schedule that generates livable income.

Attracting and retaining good workers

Offering a competitive hourly wage, plus signing or holiday bonuses and on-the-job perks and discounts can help boost staff retention. Workers who take on hourly work full-time need to make a livable wage if they are to be retained, so some full-time schedules should be available to those who want and need them. Hours for part-time workers are more flexible. Since applicants for hourly positions usually apply to multiple jobs at once, responding to applications quickly will be vital to ensuring you hire your top candidates before someone else does.

Benefits to hiring hourly workers

·       Cost savings

Depending on the amount of hours worked, many hourly workers are typically not provided the suite of expensive benefits that full-time salaried employees expect: medical, dental, retirement, etc. Employers can save money by offering other benefits, such as store discounts, bonuses, and perks.

·       Adaptability to demand

If your business sees seasonal surges, you may prefer to schedule employees based on hours actually needed. With hourly workers, you can adjust hours according to work demands and are not obligated to pay for slow periods and hours not worked. Compared to salaried workers, hourly workers have greater control over many hours each week they will work, and when, so many people who seek hourly work (like retirees and college students) are specifically seeking part-time or seasonal work according to their own schedules.

·       Scheduling flexibility

If your business requires hours outside the typical Monday-Friday workweek—as many businesses do—hourly workers can boost productivity during those evening or weekend hours that are otherwise unstaffed. Shift work is needed in some industries and can often be paid on an hourly basis. Since many hourly workers are supplementing income from another job, they may be available evenings, weekends, and other less traditional business hours.

·       Not all workers need benefits

The largest group of hourly workers are young adults who may often still qualify for medical insurance through their parents’ plans. Many other hourly workers are covered by a spouse’s plan, or they may already have another full-time job that provides benefits.

As businesses attempt to overcome staffing shortages, finding enough hourly workers is proving to be a challenge. The rise in wages is helping draw more people back to work, and they are most likely to be retained when the scheduling options work for everyone.