How to Reduce Hourly Employee Turnover
Hourly Worker Retention Series – Part 1
This can be read as a stand-alone article and as part of our Hourly Worker Retention Series.
What Are the Drivers of Employee Turnover?
Companies in every industry are struggling to find and retain their hourly workforces. With costly turnover on the rise, it becomes critical for organizations to address this issue head-on to drive competitive advantage.
Shiftboard published its 2023 State of the Hourly Worker report after surveying over 2,000 American workers to understand certain aspects of worker motivation and satisfaction. Our team partnered with Lux Insights to conduct the research and determine answers to the most burning questions regarding hourly employee job satisfaction and turnover.
In our four-part blog series, we reveal the survey findings, including little-known facts about the factors hourly employees need to feel actively engaged and satisfied in their work. We also discuss the direct impact scheduling has on retention, what employees desire in a work schedule and the strategies employers can use to improve retention.
The Psychology Behind Hourly Employee Turnover
Maslow’s renowned hierarchy of needs stated that people are motivated to satisfy certain needs over others. His hierarchy includes physiological needs, safety, love and belonging, esteem, and self-actualization. When it comes to job satisfaction and retention, hourly employees also have prioritized needs to achieve a better work-life balance.
Employee Retention: What Matters Most
Some organizations fail to look beyond pay and benefits when determining the job satisfaction of their employees. Let’s take Maslow’s theory and apply it to the workplace.
In our study, we discovered the aspects of work beyond compensation that directly impact hourly employee satisfaction and worker turnover. They include:
- Work Schedule
- Quality of Life/ Work-Life Balance
- Scheduling Flexibility
- Scheduling Consistency
Of the hourly workers we surveyed, an astonishing 85 percent said their work schedule impacts their overall job satisfaction, and 73 percent said it impacts their relationship with their manager. This data underscores that shifting organizational priorities to meet the needs of hourly employees can help reduce turnover.
The Cost of Employee Turnover
In the interview below with Frank Pereira, managing partner of Coleman Consulting Group, Shiftboard’s Steve O’Brian asked about the cost of employee turnover to organizations. “When you talk about retention costs or the cost of turnover, typically you do a calculation that involves the cost to find somebody and then train that person for a position,” stated Frank. “Those numbers, depending upon the job, skill level, and wage rate, can vary anywhere from $5,000 – $25,000 a person. Imagine if you’re at $25,000 a person — you lose a hundred people a year — you’re talking a $2.5 million hard cost.”
But turnover costs include much more than the cost of hiring and training someone new. Turnover can play a major role in the morale of other employees and can sometimes detract from the quality of work they perform. When turnover increases, current employees often need to pick up the slack in the form of overtime. This can lead to burnout, which just continues the cycle.
Scheduling: Hourly Employees’ Most Basic Need
Many companies fail to view the work schedule as a fundamental need of their hourly employees. Hear more in this video excerpt of Steve’s discussion with Frank, and discover how reducing turnover with improved scheduling can transform workforce operations:
Learn how flexible work schedules impact hourly employee retention and what strategies savvy companies can implement to improve job satisfaction and reduce hourly employee turnover in our next post.
Recommended Additional Resources
What Do Hourly Employees Want in Their Work Schedule?
Understanding what hourly employees want in the work schedule is important in a scheduling strategy that meets employee needs and organization goals.
The 5 Myths of Overtime Management: How to Make OT Work for Your Business
Managing hourly worker overtime is a complex workforce challenge, but it’s not impossible.