Challenges and Solutions to Improve Hiring Practices for Hourly Workers

ThinkstockPhotos-451645467If your business is having trouble hiring or retaining quality hourly workers, take comfort in knowing you aren’t alone. Last year, the Society for Human Resource Management published an article about how employers — those in the service industry in particular — are “finding it difficult to hire for hourly positions.” The article cited a study by PeopleMatter, which found that a full 70% of service industry respondents are having difficulty filling hourly positions. The same survey noted that 66% of respondents reported a need for more applicants while 60% were “unsatisfied with applicant quality.”

For many businesses, these types of struggles are familiar. Even in a job market that is still recovering from the past decade’s economic woes, many applicants simply aren’t interested in hourly positions. With that thought in mind, how can your business solve the common challenges of hiring hourly workers? Below, we’ve outlined what we think are the two biggest challenges of hiring hourly workers, as well as how to solve them.

1.The Challenge: Turnover of hourly workers. In addition to recording managerial worries about hourly workers, the PeopleMatter survey discussed above also provided some more objective statistics about hourly worker turnover. Specifically, the survey noted that for survey respondents, the annual turnover rate for hourly workers is just below 50%. Respondents also estimated the overall cost of each departure, pinning the average expense at $4,969 per outbound hourly worker.

It’s no secret that job turnover is costly for businesses. Recruiting candidates, interviewing applicants, running background checks, and shouldering training expenses are all standard costs of hiring an employee. Add lost productivity all the way through the pipeline and it’s not difficult to see how employee turnover could cost a company four figures for every single departure. The goal with full-time employees is for them to contribute so much to the organization (and stick around for such a substantial time) that the expense ends up paying for itself. With hourly workers leaving in droves, though, companies are finding it much harder to get a decent ROI on their hourly hires.

The Solution: It’s tough to identify a single solution to your business’s hourly employee turnover problems. Usually, though, the best course of action will be to create an environment where non-salaried employees will want to stick around for a long time. If the hourly pay is bad and the work sucks, it goes without saying that no one is going to want to think of a job with your company as a long-term “career.”

Even if you can’t pay more for all hourly positions — particularly those who are just starting out — you can make work a more welcoming place for those workers. Use employee bonding programs or outings to bring your staff together; heed complaints about managers, especially if you notice patterns. Make sure each person is getting enough training to feel competent and accomplished in their job and vary job responsibilities, when possible, to minimize monotony. Figure out ways to engage and reward creativity and new ideas; create a goal-oriented environment with rewards for hourly workers who perform well; create paths of advancement to management for hourly workers who stick around and work hard. All of these strategies can help make your business the kind of place where people want to work.

2. The Challenge: Low response rates for open positions. If you aren’t getting enough applications for open hourly positions — or are, like the PeopleMatter survey respondents, dissatisfied with the quality of your applicant pool — there could be many different issues at work. Maybe your business has a reputation for being a bad place to work, which goes back to challenge number one. Maybe you aren’t looking in the right places for potential candidates. Or perhaps your standards for an hourly employee are just too lofty, as is often the case with hiring managers who are only used to filling salaried positions.

The Solution: Let’s address each of the issues listed above individually, to give you a better sense of how you might increase the volume or quality of your candidate pool.

First, the reputation problem: since I already discussed creating a better place to work, I won’t spend much time here. However, it’s a good idea to see what employees are saying about your business, to get a sense of what your reputation as an employer looks like. You can read employee reviews on A high star rating is good. A low star rating might be scaring away potential applicants. Luckily, many of the reviews highlight specific grievances, so you can take that information and use it to create a more positive work environment.

Secondly, think about how you are recruiting hourly workers. Are you using job boards? Do you have a recruiter browsing LinkedIn or Monster looking for possible candidates? Did you post an ad in the local newspaper? None of these methods are necessarily poor, but the PeopleMatter survey found that 71% of respondents picked up their best hourly hires by asking existing employees for referrals, while 34% pointed toward social media. Diversifying your recruitment strategies and integrating these two methods specifically is a smart way to improve your applicant pool.

Finally, think about revising the qualifications you are seeking for an hourly position. Hourly jobs are, almost by definition, lower-paying and less demanding than salaried positions. As a result, they often draw younger workers without a ton of experienced, people who have been out of the job market for a while and are looking for a way to get back in, or individuals who want to work, but not on a full-time basis. Said another way, many of your applicants aren’t going to have a ton of job experience, a list of professional certifications, or extensive technical skillsets. Some might not even have college degrees. Tempering your expectations and focusing more on applicant attitude and character is a better way to snag the best hourly hires.

Michael Klazema

Michael Klazema
Michael Klazema has been developing products for the background screening industry since 2009 and is lead author and editor for a background checks community.

Michael Klazema

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One Response to “Challenges and Solutions to Improve Hiring Practices for Hourly Workers”

  1. kaweton says:

    I am a staffing specialist at a locally owned staffing agency in my area and I have been finding it harder to find the right people to place in our temp to hire companies. The companies we are staffing are not bad companies to work for and once they get hired on they have outstanding benefits, I think the issue is the temp is not seeing the light at the end of the tunnel of there and that they have a lot of attendance issues. That is probably our number one problem with our temp employees. I found this post interesting and insightful to some solutions to our staffing dilemmas. .

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