Salaried vs. Hourly Employees: Why Treat Them Differently?

There are almost 82 million hourly workers in the US. They account for approximately 60% of the nation’s workforce and spread across essential industries like manufacturing, healthcare, and transportation. 

Yet, hourly employees are routinely overlooked by the management and HR departments. They’re often thought of as unmotivated, unskilled, and expendable. 

As a result, organizations struggle to attract and retain hourly employees despite offering higher hourly wages, which results in poor workplace culture (and an even worse bottom line). 

Hourly Workers: Who Are They? 

An hourly employee is an employee who earns an hourly rate of pay based on how many hours they’ve worked. They don’t receive a fixed salaried pay the way full-time employees do. Hourly employees also typically don’t get benefits like health insurance and paid time off. 

Hourly workforce is evenly split between male and female workers. Contrary to popular belief, hourly employees are well-educated. 36% of them hold a degree from two or four-year colleges, and 27% have advanced degrees. 

Many hourly workers operate in essential industries, such as food & agriculture, healthcare, and critical manufacturing. Typically, their jobs are “deskless” and can’t be done remotely. With their feet on the ground, hourly employees keep the day-to-day operations of modern society going. 

Salaried vs. Hourly Employees: Management Differences

There is a myth that hourly employees are only interested in collecting their paycheck and don’t care about advancing their careers. As a result, managers & HR professionals devote very little attention to them, preferring to focus on employees in salary positions. 

Salaried employees are routinely given goals, profit sharing, benchmarks, training, and advancement opportunities to grow their skills. At the same time, hourly employees get minimal resources to advance their careers, and an increasing number of them report wanting to look for better opportunities elsewhere. 

It’s evident that there’s a disconnect between what hourly employees want and what their managers & HR departments think they want. 

In fact, research shows that: 

• 89% of hourly employees believe that having career growth opportunities is important for job satisfaction (as opposed to 75% of employees in non-hourly positions).
  
• 87% of hourly workers feel that being challenged is important for job satisfaction.
  
• 64% of hourly employees value having a good relationship with their boss. 

Hourly workers want to feel appreciated, recognized, and connected to their organization. They’re ambitious, and they want meaningful job growth and a supportive work environment. 

The Dangers of the Salaried vs. Hourly Employees Gap

What happens when hourly employees don’t get the treatment they want and deserve? 

Their engagement goes down. They stop feeling excited about clocking in for their shift, start taking their responsibilities less seriously, and are more likely to begin looking for a better opportunity elsewhere. 

In fact, 50% of hourly employees quit within the first 120 days of employment.

In the era of Great Resignation, with more and more employees taking their talents elsewhere despite the record-high wages, improving engagement and retention rates should be on every organization’s agenda. 

The Challenge of Hourly Employees 

So, what should organizations do to boost employee productivity and improve their retention rates? 

The truth is, saying “we’ll just treat salaried and hourly employees the same way” is not the solution. 

→ Hourly workers are different from salaried employees. 

Unlike salaried employees, hourly workers often don’t have a set work schedule or location. They switch between different stations and their schedule is prone to last minute changes. 

This makes it difficult for their supervisors to track work performance, effectively engage workers, and communicate with their teams. It also makes traditional engagement techniques, such as goal setting and quarterly performance reviews, irrelevant. 

To engage hourly employees, it’s important to understand the constantly changing and fast-paced environment of their work and work with it, not against it. 

How to Effectively Engage Your Hourly Workers for Better Productivity and Work Culture

1. Introduce Gamification into the Workspace

Gamification is a new approach to worker engagement that has shown great results for hourly and frontline teams. A recent survey revealed that employee engagement improves by 48% with a gamified work experience. 

Hourly and frontline workers typically spend the majority of their work time on repetitive tasks, such as interacting with customers or restocking items. Gamification can make these tasks more interesting by introducing an element of competition to them. 

For example, you can give a point every time an employee completes a repetitive task and reward them with a prize once they reach a certain level or number of points. Alternatively, you can split your workers into teams and see which team gets the most points. 

There are multiple ways to improve your workspace morale with gamification, from interactive scoreboards to implementing a milestones system. To learn more about gamification for employee engagement, read this article. 

2. Offer Professional Development Opportunities

Hourly workers can often feel “stuck” in their careers and feel like they’re not advancing further. In contrast, salaried employees are typically often given ample opportunities to advance their skillset or grow in their role. 

It’s natural for human beings to want to change and evolve, and hourly employees are not an exception. They want to improve their skills and progress further, and they want to work at organizations that recognize that desire. 

In fact, research shows that helping your hourly employees move their careers forward can boost retention rates by 20%. 

While traditional promotions may not be applicable to hourly employees, you can still offer professional development opportunities in the form of upskill programs, reskill programs, or mentorship opportunities. 

3. Implement Continuous Performance Management

Annual or quarterly performance reviews don’t make sense for hourly employees, so the performance review process for hourly teams is routinely pushed aside. 

Implementing continuous performance management with a tool like Secchi can increase productivity, improve retention, and help frontline leaders build stronger teams. 

It can also reduce low engagement behaviors like absenteeism and bring visibility to performance trends over time.

One of the reasons why hourly and frontline supervisors don’t have an effective performance management process in place is because they don’t have the tools they need to make it happen. 

Manual performance management is a productivity killer, and having to navigate endless Excel spreadsheets makes it borderline impossible to make sense of the data. 

Secchi combines an intuitive interface with functional features developed specifically for hourly teams to make performance management easy. Book a demo today to discover what Secchi can do for your organization.