Hourly Employee Turnover: 7 Savvy Ways to Reduce It

Around 50.5 million people quit their jobs in 2022, breaking the prior record set in 2021. 

Many of the employees who left are hourly and frontline workers, and the future prospects for hourly employee turnover are concerning. 

Research shows that 50% of hourly employees quit within the first 120 days at a new job, and financial incentives, such as raising wages, have not been proven effective in lowering high turnover rates. 

Employee turnover is costly. Terra Staffing Group estimates that replacing an $8/hour employee costs a business around $3,500, not to mention an average of $1,886 and over 47 hours a year spent on training. 

That said, the consequences of high employee turnover rate are not only financial. 

When many employees leave an organization, it disrupts productivity, lowers employee engagement, and hurts company culture (which, in turn, makes even more employees quit). 

Secchi is a performance management software built for HR professionals, supervisors  and frontline leaders, and we understand how hard slowing down the turnover cycle is. 

This is why we compiled seven proven practices you can implement in your organization to make hourly and frontline employees stay for longer and thrive in their roles. 

How to Reduce Employee Turnover Rate for Better Engagement and Profitability

The Drivers Behind Hourly Worker Turnover 

Snagajob reports that 80% of hourly workers want to start looking for a new position within a year. 

Surveying over 3,000 hourly workers has shown that the most common reasons for quitting were being unhappy with the management (27%), thinking pay was too low (25%), poor working conditions (19%), scheduling challenges (17%), and poor work-life balance (17%).  

There are also other factors, such as post-pandemic burnout (in fact, a whopping 58% of frontline workers report suffering from it) and a lack of career growth opportunities. 

But looming behind most — if not all — of these turnover drivers is the growing disconnect between the hourly workforce and the organization, which exacerbates confusion, poor engagement, and the desire to look for a better work environment. 

The Challenges with Hourly Employee Retention 

According to Gallup, increasing employee engagement can lower turnover rates by as much as 65%. 

The problem is, engaging hourly and frontline employees is notoriously difficult for multiple reasons, including: 

• Constantly-changing schedules and work hours: Hourly employees often switch shifts and work locations, which makes it harder for managers to track their performance and communicate with them.
  
• Misguided approach: Traditional engagement methods, such as SMART goals and OKRs, don’t apply to hourly workers the way they do to salaried employees.
  
• Technical barriers: Manual performance management involves too many steps and there’s a lack of functional performance management tools for hourly and frontline teams on the market. 

As a result, team morale goes down, productivity staggers, and more employees start thinking about looking for better job opportunities elsewhere. 

The solution? We outline the strongest strategies below. 

How to Reduce Staff Turnover: 7 Key Strategies

1. Implement Continuous Performance Management

Performance management is evolving, and adapting more effective and collaborative practices is essential to the long-term success of your organization. 

Annual or bi-annual reviews are too formal & infrequent to make a positive impact. They leave too many gaps and opportunities for bias, not to mention they completely miss the mark with the fast-paced environment of hourly and frontline teams. 

To increase engagement and lower turnover rate, introduce an ongoing performance management system that allows you to hold your workforce accountable and continuously improve output. 

Secchi is a performance management software built for hourly and frontline teams that streamlines your process with instant performance reviews and enhanced connections between leaders and employees. 

2. Give Your Hourly Workers More Agency

Most — if not all — of your hourly employees have other commitments outside of work. But with many of them working unpredictable hours that often change at the last minute, it can be hard to coordinate day-to-day responsibilities, such as childcare. 

Giving your hourly employees more control over their schedules or modifying their shifts creates a more positive work environment and makes your employees less likely to look for a job that better suits their needs. 

Even if the nature of your organization makes it impossible to give your hourly workers complete agency over their schedules, even small changes can make a big difference. 

3. Create a Rewards System

Research shows that companies with a recognition culture have 31% lower employee turnover and 75% of employees receiving at least monthly recognition are satisfied with their job. 

Consistent recognition is especially important for hourly and frontline workers, who often feel neglected and unappreciated, especially when compared with salaried employees. 

Creating a rewards system can motivate your employees to engage more and perform better. Moreover, it can also introduce some healthy competition into the workspace, boosting productivity levels. 

When it comes to hourly workers, financial rewards, such as bonuses and raises, are good options. You can also specifically target employee retention and reward staying with your organization for a certain period of time (ex: 6 months, a year). 

Secchi highlights leading talent and brings visibility to performance trends, making it easy to identify top employees to reward. 

4. Promote a Healthy Work-Life Balance

Burnout is one of the top reasons hourly workers across frontline industries, from retail to medical fields, are considering changing their career path. 

Implementing policies that encourage a healthy work-life balance, such as consistent break times and paid days off, shows your employees that you care about them and improves your annual turnover rate. 

Employees who have a good work-life balance are also more likely to be happier and engaged, which contributes to a positive work environment. 

5. Prioritize Training and Onboarding 

Investing in your employees’ success from the start makes them less likely to leave. 

A great onboarding experience can increase retention rates by 82%, not to mention it’ll also result in stronger output because your workers will have a better understanding of their role & responsibilities. 

Setting up a strong onboarding system will also make your employees feel that they have everything they need to succeed at their new job, which boosts their confidence and improves productivity. 

Similarly, it’s important to offer ongoing development opportunities & training to make your hourly workers feel that they’re growing in their role. 

Secchi gives you accessible & automated data to identify coaching opportunities and help your team improve their skills and performance. 

6. Foster Open Communication 

Hourly and frontline workers are more likely to stay at organizations where the culture encourages effective and genuine communication. 

Managers and frontline leaders must be able to efficiently communicate with their teams and provide constructive feedback, but it doesn’t stop there. 

Team leaders should facilitate an environment where hourly employees feel comfortable sharing their honest opinions and giving their own feedback as well. 

Employees who don’t feel comfortable providing upward feedback are 16% less likely to stay at their companies, which means that implementing open communication culture at your organizations should be top priority. 

7. Help Your Management Become Better Leaders 

According to the Harvard Business Review survey, a bad relationship with their boss is one of the top five reasons frontline employees are quitting their jobs. 

It comes at no surprise, considering that as many as 40% of frontline managers are in the first year of a leadership role and may not have sufficient experience and skills to foster an environment that motivates employees to stay. 

Moreover, the performance management process for hourly and frontline teams comes with multiple barriers, including communication issues and manual disorganization & delays. 

To boost your retention rates, focus on teaching your frontline supervisors and managers better skills and equipping them with the right tools to help them become better leaders. 

Secchi: Hourly Performance Management Software to Facilitate Better Leadership and Lower Turnover Rates 

Secchi streamlines the performance management process for hourly teams and frontline leaders with automated data, instant performance reviews, and behavioral trends over time to help you improve engagement, productivity, and turnover rates. 

In the stressful environment of hourly and frontline teams, your supervisors can’t afford to waste time on manual steps and collecting data that ends up difficult to read. 

Instead, they should spend that time on creating a positive and engaging work environment. 

Secchi makes that possible. 

Book a demo today to learn how hourly performance management software can reduce turnover rates and help you build stronger teams & leaders.