The staffing run-up to the holiday shopping season is a stark reminder of how vital seasonal, contract and hourly workers are. It’s not just that they keep store shelves stocked and get packages to our doors during one of the most hectic seasons of the year. According to data published by the Bureau of Labor Statistics, these workers account for nearly 80 million people, or almost 60% of the U.S. workforce, and are increasingly a cornerstone of the North American economy all year round.
Yet as the proportion of contingent labor grows, it comes at a mounting price. Research conducted by Gallup found that employees are increasingly disengaged and demotivated. Turnover, low engagement and lost productivity cost employers billions each year. This is felt most in fields like retail, hospitality and food service, where turnover rates among hourly employees range from 60% to 75% (compared to a more normal turnover rate of around 15%).
A generation ago, this might not have warranted concern. But with the economy at full employment and more “gig work” options than ever, labor shortages now loom as a real and present danger to companies, especially during seasonal peak times.
To compete, giants like Amazon have been boosting entry-level pay and offering competitive benefits such as health insurance. But employers are discovering that attracting and, more importantly, retaining the workers so integral to their operations comes down to something more fundamental and infinitely more challenging: ensuring that they feel connected to the business and valued for their contributions.
Identifying and educating underperforming managers
A 2017 survey conducted by FSG (via Harvard Business Review) of 1,200 entry-level hourly workers found that the majority of respondents said fair treatment from their manager was more important than their income. Additionally, 40% of men and 50% of women said they struggled at work because of unfair treatment from managers.
Given all that’s at stake, leaving leaders untrained and unsupported in supervisory roles will have consequences that ultimately cost far more than training. The reverse is also true. Companies such as In-N-Out Burger that routinely train managers in skills including delegation, people management, policy and regulatory compliance and other supervisory skills not only enjoy turnover rates far below the industry average; they gain reputations as the best employers in their fields. Far from a sunk cost, investing in managers yields exponential returns—happier customers, lower cost of recruiting, improved productivity and a safer workplace.
To put a finer point on it, training supervisors on people management in addition to task-based responsibilities can mean the difference between success and failure.
“Employers are discovering that attracting and, more importantly, retaining the workers so integral to their operations comes down to something more fundamental and infinitely more challenging: ensuring that they feel connected to the business and valued for their contributions.”
Taking a ‘salaried’ approach with hourly workers
The FSG survey also found that extending autonomy, enabling work-life balance and opening development opportunities—the very same levers that motivate salaried employees—can yield major benefits with hourly workers.
Something as simple as putting attractive furnishings, plants or free snacks in the break room can demonstrate a baseline concern for the comfort and health of employees, no matter their place on the organizational hierarchy. Similarly, giving staff control over their schedules can have an outsized impact on morale. You can implement apps like Shyft or WhenIWork as a low-cost way of empowering staff to swap shifts on short notice, giving them a degree of autonomy over scheduling.
“Far from a sunk cost, investing in managers yields exponential returns—happier customers, lower cost of recruiting, improved productivity and a safer workplace.”
Meanwhile, research conducted by Gallup found that creating opportunities for socializing and team building — including among seasonal staff — can generate inclusivity and social cohesion, another major predictor of retention and productivity.
Highlighting career progression and pathways can also boost engagement. From my experience, a sit-down with a manager to discuss career trajectory can increase attachment to an organization, even for seasonal or contract employees whose current roles may have end dates. Knowing how to navigate the organization in the hope of a more permanent role is important.
Measuring what matters to early-level employees
Of course, it’s difficult to invest in employees’ well-being without knowing what they truly want or need. But when it comes to basic data, feedback and insights, hourly and temporary workers are often a “dispensable” black box.
Traditionally, tools to measure performance, job satisfaction, and attrition have been reserved for executives and the business elite. Investing in data collection among hourly or contract workers can yield unexpected insights on poor management practices, absenteeism, excessive overtime, customer satisfaction, burnout and turnover.
The right analytics tools, for example, can reveal the correlation between overtime shifts and degradation in quality or customer satisfaction. Tracking employees across various hiring seasons and locations, meanwhile, can highlight which managers are most effective or which ones need additional training. Gathering demographics, engagement and performance data on employees and linking this information to business outcomes can help tease out answers inaccessible by intuition alone.
“Investing in data collection among hourly or contract workers can yield unexpected insights on poor management practices, absenteeism, excessive overtime, customer satisfaction, burnout and turnover.”
You can also start to build a culture of honest feedback even if you aren’t ready or able to implement a data collection solution. You can collect employees’ experiences, satisfaction levels and insights through anonymous surveys, suggestion boxes and one-on-one meetings with individuals that are open, honest and nonpunitive in nature.
High turnover has traditionally been seen as normal in particular industries and an inevitable fact of life in entry-level and hourly roles. But current economic conditions—and even the courts and governments—are prompting employers to confront the real cost of “business as usual.” The same nonsalaried employees usually given short shrift are now central to businesses’ success, and employers are finally taking notice.
This article first appeared in Forbes.