What Matters Most to Hourly Workers

Scott Greenberg thought he had managing hourly workers all figured out—until he had to do it himself.

When Greenberg, a consultant who speaks regularly on the topic of hourly workers, bought two Edible Arrangements franchises in the Los Angeles area, he did not expect to receive so many headaches from his employees. Some stole. One chronically late worker asked her colleagues to punch her in for shifts before she got there. Another walked out on the industry’s busiest day of the year, Valentine’s Day, and never came back.

Companies that rely on hourly workers often struggle with absenteeism. Catania Oils in Ayer, Mass., is one of them. It relies on its 170 hourly employees to process and package olive oils, vegetable oils and blended oils. But if too many people are out, production can grind to a halt—making it difficult for the company to fill orders.

“If we’re busy and the customer wants the product, it can be frustrating,” says Annemarie Abdo, the company’s vice president of human resources.

Retaining employees is another big concern keeping company leaders up at night. According to the SHRM research report Understanding Hourly Workers: Motivations, Expectations and Experiences, which surveyed 2,000 hourly workers in 2023, nearly half of them are currently searching for another job.

That’s an alarming statistic, says Kyle Holm, vice president of compensation advisory at Sequoia, a consulting firm in San Mateo, Calif., that specializes in benefits and compensation. “That number is just not sustainable,” because employers must have experienced workers on hand to operate their businesses.

But because hourly workers earn less, have fewer opportunities for advancement, and work jobs that can be repetitive and offer less flexibility and predictability, Greenberg says, “it’s easier for them to leave to go work elsewhere because their relationship with management is more transactional.”

With hourly workers, “there are a lot of things about their work and about their circumstances that make them different,” says Greenberg, author of Stop the Shift Show: Turn Your Struggling Hourly Workers Into a Top-Performing Team (Entrepreneur Press, 2024). “They need to be recruited, retained and led differently. Management has to be more humane. It’s not enough to be a results-oriented manager. It’s about building a culture where they feel part of something.”

So, what exactly can companies do to better attract, retain, engage and manage hourly workers? Abdo, Greenberg, Holm and other leaders say they have found some answers.

Show Them the Money

The persistence of generally stagnant wages over time is one factor causing hourly workers to frequently seek new employment, workplace experts say. A tight labor market is currently giving many of them the option to earn more elsewhere, adding to their mobility.

When adjusted for inflation, the median hourly wage in the U.S. was $22.88 in 2022, compared with $21.10 in 2002, according to the Economic Policy Institute. Moreover, 67 percent of hourly workers have a household income below the national median of $70,000, SHRM’s survey of hourly workers found. As inflation has contributed to higher prices for groceries, gas and other needs, hourly workers are feeling the pinch. Nearly three-quarters of them (73 percent) would stay in their current job for a higher wage, according to SHRM’s research. Of those workers, 28 percent would consider staying if they got a pay increase of less than 5 percent.

“Employers wonder why these people go someplace else for 50 cents more an hour. It’s because if they stay loyal to the company, all they get is a 2.5 percent pay increase, and they can never better their lives,” says Cara Silletto, president and chief retention officer at Magnet Culture, a consulting firm in Louisville, Ky., that helps companies reduce employee turnover.

Silletto specializes in helping companies with low-wage, front-line hourly workers. “Every new hire is a flight risk,” she says of this segment of the workforce.

But raises don’t have to come in the form of across-the-board wage increases, Silletto says. Bonuses and other creative solutions can go a long way toward retaining top employees.

To counteract the ongoing risk of interrupted production due to employee tardiness and absenteeism, Catania Oils began to reward workers with a weekly bonus if they didn’t miss any shifts or didn’t come in late more than twice in a week. This has brought the rate of unscheduled absences down from around 7 percent of hours worked to about 2 percent, Abdo says, and helps to keep production moving.

As later shifts at Catania became increasingly difficult to fill, the company also started paying $2 more per hour for second- and third-shift workers—which has helped the company staff up. Catania has also introduced monthly incentive bonuses for meeting schedule goals and accurately recording inventory.

Being creative about compensation increases may also mean differentiating between top­performing workers and those who aren’t hitting the mark. “When you have a top performer, the cost of turnover far exceeds the increase that it would take to keep them,” Holm says, which means managers need to be trained to identify and develop top-performing employees.

“The manager should be the eyes and ears for the organization on any retention risks and should be able to identify where a company should make their investments,” Holm explains. “Are you proactive in making sure that you keep your key employees, or do you just have a policy that you’re applying across the board and not looking more into the individuals?”

Show Compassion

Money is certainly a factor in engaging and retaining an hourly workforce, but it won’t single-handedly solve the problem. “Anyone can offer more money,” Greenberg says. “It’s not a model that can be sustained. And you don’t want to attract only people motivated by money.”

The pandemic laid bare the striking differences between front-line hourly workers and the executives who run their companies. During the days of quarantines and mandated social distancing, many managers were able to work remotely, while many hourly workers—especially in the hospitality industry—had jobs that required them to show up in person. This compounded the ongoing disconnect between executives and front-line workers.

“A lot of senior leaders and executives have become quite disconnected from the reality of our front-line workers,” Silletto says. Those realities include not only financial struggles, but also an ongoing lack of flexibility, such as the ability to take time off to go watch one’s child in an afternoon kindergarten program or to work from home on a snow day.

The pandemic reset how employees think about the role work plays in their lives and how they want to be treated when on the job. Showing compassion doesn’t cost a thing and is highly appreciated by all employees.

However, some company leaders still struggle with this. Silletto regularly hears hourly employees complain about a lack of personal regard from managers. “I’d prefer to be called by my name—not my trucker number” is one example he’s heard.

A whopping 90 percent of the 2,000 hourly workers SHRM surveyed said knowing their company cares about its employees is important to them. “It sounds obvious, but hourly workers notice and appreciate when their employer cares about them and their efforts,” says Derrick Scheetz, a senior researcher at SHRM. Managers should start showing compassion at the applicant stage of the hiring process, Greenberg says. Like many employers, he has been “ghosted” by prospective employees who haven’t shown up for scheduled job interviews. Rather than writing all of them off as unreliable, Greenberg calls them to inquire if they’re okay. Some no-shows have a good reason for not making it to an interview, and following up with them has netted Greenberg some valuable talent.

One of the companies Greenberg cites in Stop the Shift Show is a provider of home care services in England. When applicants come to interviews, they arrive at a reserved parking spot marked with their name. This communicates to potential hires that “we are different, and we value you,” Greenberg says.

The company also works hard to keep employees connected as they work scattered among the homes of customers, he adds, noting that the company has retention rates of 85 percent or higher.

Companies should also put more effort into onboarding, Silletto says—and not just for the first few days. This should include checking in with new hires every few shifts as they settle into their new routines. It can also mean providing chances for advancement sooner for new workers who quickly learn new skills.

Another way companies can show respect to their workers is by being clear and upfront about what they expect from new employees in terms of responsibilities and attitudes. Workers who start a new job and find it doesn’t match the advertised description often aren’t going to stick around, Holm says. He notes that In-N-Out Burger has a reputation not only for paying workers well above prevailing wages if they’re aligned with the fast-food chain’s mission, but also for being transparent about what it expects from workers, down to how to cut the potatoes.

Create a Desirable Workplace Culture

SHRM’s research revealed that workplace culture is especially important to younger generations of hourly workers. Just 22 percent of Baby Boomers and Traditionalists say culture is a factor in deciding to remain in their jobs, compared with 39 percent of Generation Z and younger Millennials.

“This may be because younger, less experienced workers feel the brunt of bad management more often and have less clout to address problems with company culture,” Scheetz says. Not surprisingly, members of those younger generations are also the most likely to be searching for another job: 60 percent of them are on the hunt, compared with 46 percent of the hourly workforce overall, the SHRM study found.

Catania Oils’ culture has proved to be an advantage when it comes to engaging its hourly workers, Abdo says. The company was founded by an Italian immigrant who first peddled his olive oil door to door, and 13 of his descendants work at the company today. Employees really appreciate it when those family members stop by the floor to talk with them, Abdo says. Catania also recognizes its employees with gift cards, company products and personalized notes for each worker from their managers.

Wages at the company are competitive and are re-evaluated twice a year. But Abdo says she doesn’t think pay alone is enough to retain employees. “It’s culture,” she notes. “We try to be family-friendly and provide opportunities for growth.”

Catania Oils conducts employee engagement surveys three times a year to get feedback, and the information is given weight by senior leaders, Abdo explains. For example, Catania’s bonus plans for meeting schedule, accuracy and attendance goals came from employee suggestions in the survey.

“We’re trying to really work with the employees to understand what motivates them,” Abdo says.

Offer Scheduling Improvements

For hourly workers, a big part of workplace culture is having control over their schedule. SHRM’s hourly workers survey found that 51 percent of such workers say the nature of their work schedule is an important consideration when weighing whether to stay with an employer. In response, some employers are offering time “pods” that workers can choose from. One pod might have schedules set a month in advance for those who want predictability, and another might be more suited to those with other jobs who don’t want to be committed to a schedule too far in advance.

“The employee value proposition has shifted substantially,” says Tim Chatfield, CEO and co-founder of Jitjatjo, a New York City-based tech company whose virtual marketplace matches workers and companies in the hospitality and retail industries. Generation Z workers are outspoken about what they want to get out of work, and they want to take ownership over when they work, Chatfield says.

And the workforce is getting younger. By 2025, research indicates that Millennials will make up 75 percent of the global workforce.

Chatfield says many businesses are responding to employees’ desire to have some ownership over their schedules. “There’s a shift toward flexibility,” he says. “The workforce … is putting a higher priority on their own schedules, in terms of, ‘These are my life priorities.’ Pre-COVID, people were fitting their life around work. I think that has changed.”

The tight labor market also requires thinking creatively about where potential workers are located. Catania Oils found help for tough-to-fill machine operator jobs through a state hiring program for immigrants. Abdo says the company hired six documented Haitian immigrants and made the jobs work for them by providing English classes, a translator during onboarding and the first weeks on the job, and instructions and safety information in Haitian Creole.

Catania Oils also works with a staffing agency to find potential workers recently released from prison. “People overlook them,” Abdo says. “But staffing has changed so much, you have to look at the pools of people who want employment.”

It all boils down to this: “For hourly workers, the basics matter,” Scheetz says. “Those include good pay, pay equity, reasonable schedules, transparency, respectful treatment and a sense that the company cares about their people.”

The good news for employers? “None of this,” Silletto says, “is rocket science or difficult to do.”    

Tamara Lytle is a freelance writer in the Washington, D.C., area.