Employee Retention for Hourly Service Workers

 with Incentive-Based Technology

Abstract

Employees are the lifeline of all organizations. Despite a significant proportion of contemporary organizations being technology-driven, human resources are still needed to manage and utilize such technologies. As such, humans are still the most critical resources for all organizations. With apparent development in all spheres of the economy, there has been a more significant rivalry in the labor market. With such competition and development, several opportunities and avenues exist in the hands of human resources.

Nonetheless, the major challenge organizations face at present entails both the management and retention of the workers. For example, a recent study has indicated that the increased turnover rates among hourly services workers cost approximately 200% of the employee's yearly salary. This is dependent on aspects such as duties and roles. Within the services industry, the turnover at the entry-level was attributed to several billions of dollars in losses suffered by the organizations annually, mainly due to the turnover rates and annual replacement costs.

Additionally, the employers' decision to disengage the hourly service workers resulted in an overall reduction in business earnings, increased absenteeism, more accidents, lousy customer service, and reduced share prices. Attracting and retaining the best talent plays a vital role in all organizations, given that workers' skills and knowledge are at the core of the organization and its aptitude to be competitive in the market. However, the continued motivation and satisfaction of the workers is another challenge that organizations and employers alike are currently faced with. Considering the sensitivity and significance of employee retention to all organizations, the present paper seeks to review various employee retention strategies, particularly strategies applicable to hourly services workers in technology-based organizations. The paper will review the extant literature on hourly service workers' job satisfaction and retention to attain this objective.

Introduction

The hunger for novel and creative ways of attracting and retaining employees has led to organizations across the globe to turn to different incentive structures, including bonuses, as a means of driving the acquisition and retention of talent. However, recent studies have indicated that organizations depending solely on such conventional benefits often miss the vital opportunity to deliver on things that their workers value most. This is most notable in the 55% of employees compensated on hourly services (Harris, 2018).

Millennials and subsequent generations make up approximately 60% of the workforce employed on an hourly services basis. Such "digital native" workers have grown up with increased access to the internet and are avid users of online and mobile apps within most aspects of their lives. Therefore, such workers anticipate having comparable digital experiences with their employers. Nonetheless, despite considerable investments made by many organizations by introducing novel technologies to enhance the customer experience, these investments have not yet served to improve or simplify the workers' experiences. Therefore, as organizations continue to grapple with the increasingly competitive labor market, there is a need to rethink the benefits and values of their hourly service compensated workers through incentives-based technologies.

Most incentive programs targeting hourly service workers are primarily used to promote productivity and efficiency among the employees; however, organizations may also use them to improve worker recruitment, involvement, and retention. These incentive-based compensation programs originate from a theory that maintains that rewards are the primary motivator when it comes to behavior. In the corporate context, employee incentive compensation programs allow companies and employers to generate targeted outcomes by rewarding workers responsible for the results.

Literature Review

In the contemporary business world, organizations and employers in technology face challenges concerning the retention of hourly services talents. Nevertheless, human resources management plays a significant function in ensuring that an organization can retain the best talents. In this regard, Okbagaber (2019) maintains that offering various incentives to the employees is vital due to the lasting impact on the workers. Valued, aptly incentivized, satisfied workers are more likely to work longer for their organizations. Therefore, job incentives are vital components which indicate how much employees advance through the devotion of their efforts, skills, and knowledge to meet the organization's goals and targets (Kashyap & Verma, 2018). The employers, therefore, have a duty to develop incentives that attract and retain the best talent.

Several kinds of incentives have been designed to ensure that organizations retain their hourly services employees. In reviewing the best incentives for the retention of hourly workers, Sarver (2017) notes that hourly services employees are amongst the most unsatisfied and unhappy workers in any workforce. This is attributable to fewer vacations, limited advancability, , and lesser benefit programs in comparison to their salaried colleagues. Such observations are not surprising, as several organizations hire hourly service workers with their primary focus resting mainly on the amount of money they have to pay to attract qualified talents instead of the benefits and perks that would set them apart from other organizations.

Among the notable incentives that have been found to enhance employee satisfaction and high retention rates among hourly services workers is work flexibility, which was recently disclosed in recent research conducted by Nasir and Mahmood (2018). The study revealed that while almost 36% of the hourly services employees noted that work flexibility was the most significant incentive, only about 50% of the employers planned to provide hourly services to workers. In agreement, Harris (2018) maintains that organizations that offer job flexibility to the hourly services workers are likely to experience significant improvements in terms of attracting and retaining hourly services workers at even lower pay rates. Further, Kashyap and Verma (2018) maintain that offering work flexibility to hourly service workers entails giving workers increased control in regard to their work schedules, which include where and when they work. Such flexibility is perceived as important as workers have various personal and financial obligations that they would wish to create time to accomplish.

A recent study with one thousand hourly worker participants and management-level workers in North America disclosed that one of the key reasons underlying the high turnover rates among the hourly services workers, apart from payment, was related to their work schedules. The study disclosed that 59% of hourly service employees would quit their jobs due to a lack of adequate schedule empowerment. Therefore, one of the incentives capable of making an immediate impact on hourly service workers would be increased control of their own work schedules to enable them to have choices and make decisions on when, how, and where they would wish to work. From the organizational business perspective, the provision of work flexibility to hourly service employees is a low-risk decision, and if enabled through technologies like mobile apps, is capable of making a significant difference in the workers' personal and professional lives since it will effortlessly allow them to swap and pick-up additional shifts.

Further, according to Okbagaber (2019) in a recent study, 82 percent of the hourly service employees indicated that they were highly liable or liable to work for an organization offering increased schedule empowerment alongside various contemporary communication tools. Additionally, the study disclosed that 13 percent of the hourly service employees indicated that they were willing to work for any organization offering such benefits. Such observation implies that organizations that fail to provide their hourly service workers with such benefits are at a high risk of experiencing employee attrition or high turnover rates. According to Harris (2018), employee turnover has a substantial impact on an organization's bottom line, even as the cost of hourly service worker replacement is estimated to range between $2000 and $7000.

Still, in analyzing the best way to retain the hourly services workers, Sarver (2017) maintains that contemporary communication technology can enhance the retention of hourly services workers. Hobbs et al. (2020) assert that the ongoing Covid-19 pandemic has pushed organizations and their clients to embrace mobile apps and online technologies to conduct their everyday activities. Although this resulted in several organizations in the service industry leveraging technology to enhance their communication and interaction with the clients, they failed to implement the same changes for their workers, particularly the hourly service workers.

Several contemporary organizations are still dependent on paper-based spreadsheets and rudimentary software for the development and subsequent communication of workforce schedules and still post physical documents on the bulletin boards to share organization news. Such outdated communication tools and modes directly impact the engagement of workers. The antiquated tools make it increasingly challenging for the hourly services workers to communicate and interact with both management and colleagues. Additionally, such outdated communication tools have resulted in a negative organizational culture where the workers do not know or care about the organization's growth, performance, and success. To this end, Kashyap and Verma (2018) opine that nearly 40% of hourly services workers have indicated that they are likely to leave work because of poor communication between them and the management.

Furthermore, from the point of view of the hourly services workers, having increased access to mobile and online applications-based communication devices is a great benefit capable of enhancing both engagement and communication (Nasir & Mahmood, 2018). Technology-enabled and schedule-aware employee management solutions permit workers to effortlessly share their individual needs and shift preferences with the managers and colleagues. Additionally, the technologies can offer timely digital news feeds that enable the sharing of the latest information and news, directly communicating health and policy updates to workers, and highlighting the organization's top achievers. Within the workplace context, such digital solutions are capable of offering the management the necessary "compliance-first" solution for scheduling that enables them to effectively match the hourly service workers’ preference to the business goals and deficiencies, even as they remain within the organization's budget and ensuring full compliance with the local labor laws (Watts, 2018).

The provision of early access to salaries or payments is also considered an important aspect in the motivation and retention of hourly services workers. Thus, according to Amadi et al. (2021), the other notable high-value benefit that an organization may provide to its hourly services workers involves stress-free and timely access to their earned wages. In one of the most recent studies, over 50% of the participants indicated that they experienced financial emergencies, at least once annually, even as almost 75% of the interviewed hourly services workers reported that it was important for them to access timely payments in instances of emergencies. One out of every five participants reported that they were likely to borrow money from banking organizations, friends and family, and payday lenders in instances of financial emergencies.

The outcomes and follow-on effects of hourly services workers' financial stress may be extremely detrimental to business organizations, and it is, therefore, not surprising that approximately 20% of United States organizations are anticipating the ability to deploy flexible and easy to access solutions to employee wages in the subsequent few years (Djeumo Sandjong, 2021). The provision of on-demand and timely pay can enhance the general financial well-being of the hourly service workers, which, in turn, will have positive impacts on their engagement and productivity and the bottom lines of their organizations. Ultimately, the provision of benefits that the workers highly value, including schedule empowerment, instant and easy pay access, and digital communication, is likely to result in an increasingly productive and happy hourly services workforce in conjunction with increasingly successful organizations with lower employee turnover and higher retention rates, particularly among the hourly services workers.

Such aspects are considered to be decisive factors regarding instances where potential hourly services employees are tasked with selecting an organization over the rivals, and more significantly, remaining with the organization long after their hiring. Within the increasingly competitive labor market, the provision of easy access to wages is one of the notable advantages that an organization requires to effectively attract and consequently retain their hourly services workers and grow their organization.

The other notable aspect that organizations can utilize to effectively hire and retain their hourly services workers entails the provision of bonuses as an incentive to the employees. According to Gosser et al. (2018), the other work benefit that the hourly services workers typically care about regards the provision of performance-based workers bonuses. Recent research by Hsia (2018) indicated that 27% of the hourly services workers interviewed believed that bonuses were some of the most vital work benefits. Moreover, the study indicated that nearly 54% of the employees interviewed noted that they were likely to change jobs in instances where the organization's compensation plans included an aptly developed bonus structure.

Despite the observation that the provision of bonuses appears to be similar to paying more per work hour, which many hiring managers cannot do, bonuses are dissimilar. That is because bonuses are usually based on work performance. Therefore, it's a win-win situation if you pay an hourly worker less but offer them a large bonus if they perform well. In instances where the hourly services workers fail to meet the set goals, the employer does not have to pay the bonuses (Amadi et al., 2021). However, in case they meet the goals, the employer pays more but can get improved outcomes and performance. Therefore, employers should offer their hourly workers adequate bonuses tied to their performance as incentives to retain the best talents. Through such incentives, the employer will also be able to attract an increased number of talents and offer them greater worker incentives to enable those workers to work harder.

Even so, the provision of vacation time is also considered an important incentive that employers can use to attract and retain the best talent, including the hourly services workers. Almost 13 percent of the hourly services employees who participated in a survey reported that the most important incentive they sought in organizations was paid time off (Gosser et al., 2018). Nevertheless, a larger proportion of the employers offering hourly waged employment opportunities do not provide adequate paid time off in instances where they offer that. On the surface, the provision of paid time off to hourly service workers does not appear to be a better idea since it does not offer the organization any benefit to offer such workers such time offs when they may have the employees at work and being productive. However, a number of better reasons exist and underlie the need to provide hourly services workers with paid time offs. For instance, the provision of paid time off is palpably significant to the hourly services workers. This means that the provision of increased amounts of vacation time is likely to enable the employers to provide lower hourly rates while also being able to hire more experienced and qualified talent.

Additionally, a larger proportion of employees often fail to make use of their earned vacation time, implying that the provision of paid time off to the hourly services workers might not have any lasting impact on the organization to the extent that the employer might have initially thought. Furthermore, in instances where an organization finds itself in a position in which it can provide its hourly services workers unrestricted vacation times, regardless of whether it is unpaid vacation, it will be challenging for a potential employee to forgo the organization, even in instances where the rival firm is offering higher wages. Moreover, as outlined earlier, hourly service workers will not opt to spend an increased amount of funds on vacation, regardless of having such an option.

Employee recognition and engagement are other aspects that organizations should consider to retain their best hourly services talents. According to Djeumo Sandjong (2021), employers should not simply roll their eyes and make remarks referring to the new crop of talents as millennials. It is worth noting that workers, whether employed on a full-time basis or on an hourly basis, mainly thrive on recognition, engagement, and reception of general feedback. Such aspects are considered as the building blocks that enable career enhancement and advancement.

Further, the deficits in worker engagement and recognition are quite simple to tackle, and on most occasions, do not cost the organization any considerable amount of funds. Meanwhile, employee recognition has the aptitude to enhance the organization's culture while increasing talent retention and boosting their morale. Simpler ways to ensure that an organization develops effective employee recognition programs exist. For instance, an employer might begin by simply sending end-of-the-month emails that highlight the month's ups and lows. Such types of positive feedback are likely to improve the employee's work and performance. The employers may even gamify worker recognition, develop the social media employee shout-out, or even just offer a pat on the hourly services workers back upon successfully executing a grueling and challenging project or day (Gosser et al., 2018). The employer may take it a step further by considering the need to execute human resources technologies and even a worker recognition program across the organization to promote everyday peer-to-peer recognition. In this regard, it is recommended that the employer make decisions about the type of employee recognition program that befits his organization and execute it in a timely manner to attract and retain the best talent.

Consequently, with regard to employee engagement, Kryscynski (2021) maintains that several hourly services workers often develop a sense of not belonging or being part of the company, and oftentimes even feel that they are just temporary employees. Nonetheless, several surveys have disclosed that the hourly services workers normally desire to be increasingly engaged with the organizations that they work for.

Several methods exist and can be used by any organization and its management to ensure that the hourly services workers develop the sense of being engaged. One of the recommended ways of starting entails the creation of an organizational culture of inclusion in addition to making sure that the hourly services workers are treated and that it is aptly communicated, similar to the way it is done to the salaried and full-time workers. Further, it is proposed that management and other workers invest adequate time in trying to know the hourly services workers and develop effective personal relationships (Kryscynski, 2021). In instances where the hourly services workers successfully integrate, it is better to retain them on a full-time or salaried basis. Further, it is recommended that the employers and managers maintain regular communications with the hourly services workers. Several hourly services workers have complained that they are only given tasks and are not afforded the chance to regularly communicate with the organizations' management. Establishing an open line of communication and regularly checking in serves to assist the hourly services workers on tasks and ensure that they develop the sense of being increasingly engaged with the team and organization.

Other notable proposals have been made to ensure that the employers successfully retain their best hourly services workers. According to Hsia (2018), organizations should train frontline managers and supervisors to support other workers and processes. Still, Onken (2020) maintains that job contentment of the younger persons, who form a large part of hourly services workers, and who have been surveyed, has been driven largely by the way they perceive the managers treatment of them. According to the hourly service employees interviewed, they perceived fair treatment and being respected as increasingly important compared to their incomes. However, almost 40% of male and 50% of female hourly services workers surveyed noted that they were struggling at their workplaces as they developed the sense of being treated unjustly by the management (Sandjong, 2021). Still, of the hourly services workers interviewed, 32% of the workers noted that they had left their jobs previously due to disrespectful and unjust treatment by the organization's management. Such observations raise questions of the most effective means to ensure that their management becomes effective.

According to Onken (2020), among the proven methodologies includes investing in certain training for the various frontline managers, particularly those who get promoted to such managerial positions despite having no team management experiences. For instance, MOD Pizza is an organization that employs several hourly service workers, sent its employees to a training program during their initial six months of getting hired (Abba & Babanmairam, 2021). The in-person program also offers management training tasked with coaching novel managers on aspects of human resources management, communications, and the development of better organizational culture. Approximately 96% of the MOD Pizza managers who participate in the training have reported an increment in confidence levels leading to improvement in performance (Abba & Babanmairam, 2021).

Lastly, to effectively retain hourly service workers, it is recommended that employers should provide the workers with professional development opportunities and work towards inclusion as opposed to just diversity. Several studies have shown that younger individuals, employed on an hourly services basis, are over twice as likely to remain at their jobs for over one year in instances where they perceive the jobs as either career or stepping stones to career advancements (Solihah et al., 2021). However, only 35% of such young individuals who participated in the study reported their present jobs under such terms. Therefore, for the employers and organizations to close such gaps, it is recommended that the employers provide the hourly service workers with clear and important opportunities concerning professional growth in their organizations.

Organizations like Chipotle have highlighted clear and palpable career paths for their entry-level hourly services workers using their websites and directed the new hires to the website on the 1st day of employment (Solihah et al., 2021). The different career paths indicate promotion opportunities and benefits, and wages attached to every phase of the employee's professional growth. Approximately 90% of Chipotle's management team are mainly workers who get promoted from the company's existing workforce. Further, the employers may offer support for the hourly service workers’ educational advancement . Thus, 45% of youthful hourly service workers who participated in a study conducted by Abba and Babanmairam ( 2021) indicated that they wanted to advance their education by going to college even though the study disclosed that the hourly services workers enrolled in college while working were increasingly likely to remain in their present jobs.

Starbucks has been recognized globally for its college achievement program that provides free tuition for its hourly services workers taking various online classes offered at Arizona State University and personalized guidance to the workers seeking information regarding college education (Abba & Babanmairam, 2021). Such initiatives have eliminated costs, schedule, and knowledge hindrances for the workers, and the outcomes have indicated that the initiative has paid off, given that the employees participating in the program have remained twice as long and have been promoted four times as many times when compared to their colleagues who do not partake in such educational initiatives.

Consequently, regarding inclusion in the workplace, recent studies have disclosed that racial and gender disparities exist in how hourly services employees experience employment. For instance, recent studies have disclosed that women are 10% more likely to experience unjust treatment by managers than their male counterparts regardless of ethnicity or race. Researches conducted in the United States have also concluded that, in the retail sector, Caucasian men were increasingly liable to hold management positions. More entry-level hourly service workers were likely to be younger persons, women, and minorities (Solihah et al., 2021). In this regard, to ensure retention of hourly services workers, it is recommended that employers should develop increasingly diverse and inclusive workplaces in their organizations.

Conclusion

In any organization, employee retention plays a critical role in successfully attaining the set goals and objectives, ensuring attainment of not only the bottom line, but also general employee satisfaction. However, retaining hourly services workers is not always about benefits and compensations. Effectual hourly services employee retention is capable of saving a company from potential productivity losses. Thus, high retention organizations that employ increasingly engaged and motivated employees often benefit from high performance and increased profitability. Engaged hourly services workers are also highly prone to exhibit enhanced customer relations and develop highly productive teams in the organizations. Among the notable proven ways to retain hourly service employees entail provision of schedule empowerment and modern communication tools, ensuring work flexibility, ensuring employee engagement, provision of vacation time, and establishment of employee recognition and engagement programs, among other strategies.

References

Abba, M. T., & Babanmairam, M. (2021). Does Learning Opportunity Matters in Employee Retention?.

Amadi, O., Zeb-Obipi, I., Lebura, S., & Poi, G. (2021). Reward System: A Tool for Employee Retention as Observed from the Banking Sector in Port Harcourt. Journal of Human Resource Management , 9 (2), 50-57.

Djeumo Sandjong, F. L. (2021). Training Strategies for Increasing Employee Job Satisfaction and Retention in the Hospitality Industry.

Gosser, K., Petrosko, J., Cumberland, D., Kerrick, S. A., & Shuck, B. (2018). Organizational justice and socialization in a franchising context: Factors influencing hourly workers’ intent to stay. Small Business Institute Journal , 14 (1), 1-18.

Harris, C. N. (2018). Employee Retention Strategies in the Information Technology Industry (Doctoral dissertation, Walden University).

Hobbs, M., Herrero, T., Klachky, E., & Cooper, M. (2020). Leveraging pay and benefits as workforce retention strategies: Insights from a case study of Napa vineyard workers. Catalyst: Discovery into Practice , 4 (1), 33-38.

Hsia, S. (2018). The Role of Organizational Buy-in in Employee Retention (Doctoral dissertation, Seattle Pacific University).

Kashyap, V., & Verma, N. (2018). Linking dimensions of employer branding and turnover intentions. International Journal of Organizational Analysis .

Kryscynski, D. (2021). Firm-specific worker incentives, employee retention, and wage– tenure slopes. Organization Science , 32 (2), 352-375.

Nasir, S. Z., & Mahmood, N. (2018). A study of the effect of employee retention on organizational competence. International Journal of Academic Research in Business and Social Sciences , 8 (4), 408-415.

Okbagaber, T. B. (2019). The effect of human resources management on employees retention in IBM corporation. Journal of Asian Business Strategy , 9 (2), 158.

Onken, J. (2020). Policy and Factors Affecting Retention of Working Mothers in the United States (Doctoral dissertation, The College of St. Scholastica).

Sandjong, F. L. D. (2021). Training Strategies for Increasing Employee Job Satisfaction and Retention in the Hospitality Industry (Doctoral dissertation, Walden University).

Sarver, R. C. (2017). Important Aspects of Job Satisfaction for Full-Time Hourly Production Workers and how they Affect Retention in Small, Rural, Iowa Markets . Wilmington University (Delaware).

Solihah, M., Indrawati, R., & Hasyim, H. (2021). Improving Retention of Healthcare Workers At Service Industry Through to Compensation Strategies. Journal of Multidisciplinary Academic , 5 (3), 280-287.

Watts, J. (2018). Perceived Work Status Congruence and Voluntary Turnover Intentions of Tipped Hourly Casual-Dining Restaurant Employees (Doctoral dissertation, Capella University).