Hourly workers demand more from employers
As the economy reboots, hourly workers are asking for more. They’re positioned to get it.
Hourly workers suffered the brunt of the economic challenges of COVID-19 and beyond. They were often the first to be laid off or furloughed because so many hourly jobs were incompatible with many of the lockdown restrictions (i.e., they require working in the physical world and interacting with real people face to face). Or worse, they were told they were “essential workers” and made to face the stressful situation of being exposed to illness and an irate public.
Now, however, the tables have turned and there are too many job openings chasing too few candidates. Employees have the upper hand and, if the Bureau of Labor Statistics data is anything to go by, they know it. Since July of 2021, the quit rate in the U.S. has hovered at or near a historic high of 3%. If that wasn’t bad enough for employers, industries like leisure and hospitality (where hourly employees make up the bulk of the workforce) are leading the charge for the exits.
Related: 3 high-value benefits to attract and retain an hourly workforce
While there’s been much psychological and philosophical speculation about what’s driving this trend, those explanations can’t get around the hard economic fact that hourly workers see an opportunity to improve their quality of life at work and at home.
According to recent research by PwC, the top four reasons employees listed as why they were looking for new jobs were: wages, benefits, career advancement, and flexibility. Employers that want to avoid an endless cycle of hiring and replacing talent should be evaluating how they can compete more effectively on all these fronts.
Historically, hourly workers are neglected when it comes to advances in benefits and the employee experience, but the time has come for employers to get creative and innovative about competing for talent.
Higher wages alone won’t be enough
While wages are rising predictably among hourly workers in general, there are limits to how high employers can afford to go. Additionally, there is evidence that recent increases in inflation are eating up much of these gains. Higher wages alone aren’t enough, so you have to also be creative and thoughtful in terms of benefits. To provide a financial benefit without breaking the bank, an innovative benefit that many organizations are adopting is on-demand pay.
On-demand pay is a differentiator that offers employees greater flexibility around when and how they access their pay. In fact, according to a study by the American Payroll Association, 25% of employees want employers to provide on-demand pay; that number is as high as 80% in another study.
Putting hourly workers in the driver’s seat on pay frequency creates financial stability and reduces the need for employees to rely on predatory payday loans and check-cashing services. It is also a powerful differentiator for employers in desperate need of talent.
Break the benefits mold
In an increasingly competitive market, creating an unparalleled work experience by giving hourly workers the tools they need to better their lives is more important than ever. Because traditional benefits aren’t available for hourly workers, organizations need to look beyond payroll and health care to attract and retain talent. Providing those who traditionally don’t have access to traditional benefits with the ability to access earned wages is an opportunity for employers to provide value in a new way.
On-demand pay breaks the mold of traditional benefits, offering employees pay at the end of each working day. This revolutionizes the way employees get paid. Instead of waiting a week or often two weeks, employees have access to their wages the day they earn them, bringing benefits into the modern economy.
Offer greater autonomy and flexibility to your people
When someone mentions flexibility in work, we usually picture working remotely on the couch next to a laundry basket. In fact, some of you reading this article might be doing exactly that right now. But what does flexibility mean for hourly workers?
For years, lack of control over their schedules and their pay has been a major complaint among hourly workers. While scheduling may still be uncertain, on-demand pay takes some of the uncertainty out of hourly work by reliably providing access to wages the day they work. Addressing this long-held complaint of hourly workers is an excellent way to increase engagement and differentiate your employment brand from those of competitors.
Modern lives don’t follow the linear schedule of biweekly pay periods. This means that on-demand pay is so much more than a fun perk some businesses can offer to show they go above and beyond. On-demand pay is here to stay, and that means employees will be expecting it, especially with their newfound power in this tight job market.
The current hiring market presents a massive challenge for employers hoping to attract and retain high-quality hourly talent. However, for organizations willing to adapt and embrace the reality of the situation, there are also profound opportunities to reposition themselves as employers of choice. Meeting employee pay expectations with on-demand pay is an easy way to make a difference in your employee experience.