Reducing Your Hourly Worker Turnover

The cost to U.S. Businesses of hourly worker attrition and lost productivity is $350 billion annually. According to the U.S. Department of Labor, hourly workers have an average turnover rate four times higher than that of their exempt counterparts. The Hourly Nation, consisting of 1.3 billion workers worldwide and 17% of GDP in the United States is crucial to the industries they support – including, but not limited to, restaurants, convenience stores, hospitality, entertainment, retail, grocery stores and wholesale distribution. On average, replacing these vital employees costs one-third of their annual salary. It’s expensive to keep hiring and replacing even low-wage earners. Replacement costs will vary depending on the industry, the person’s wage, and the scarcity of the skill set that you are trying to backfill, but some studies show it costs as much as $8,000 to replace an hourly low-wage employee. With average turnover rates pushing into the 200% and higher range, hourly nation-supported industries need to ensure they are doing all they can to find, manage and retain the best possible candidates.

Finding and hiring the right employees is certainly the first step to tackling costly attrition. Employers will absolutely want to utilize an efficient applicant tracking system that fits with the candidates they’re looking to bring on board. Efficiency is key here as being hired quickly is the number one factor that hourly jobseekers look for. Efficiency obviously does not occur when organizations use manual hiring so employing a competent applicant tracking system is pivotal.

Companies will further want to ensure their positions are being advertised through social media platforms. The fact is, hourly workers that are active on social media are also typically more productive employees. A recent study reveals that among hourly workers, those using five or more social networks are more productive and better at handling customer relations, maintaining a 1.57% higher sales conversion than their peers and processing transactions in 2.76% less time. The study also found that those recruited on social media platforms stayed with their organization 11% longer than those brought on board in other ways. Overall, these numbers will save companies millions of dollars.

The next step to successfully decreasing attrition rates involves effective management. Talent management of the hourly nation gets very difficult if the right course isn’t used. Some key factors to managing this group involve proper onboarding and training as well as frequent performance reviews. Securing a strong initial onboarding process sends the message that the company is looking forward to the employee coming aboard and shows higher levels of organization. Research has supported the idea that effective onboarding can have a dramatic effect on job performance and satisfaction, organizational commitment, and retention.

Second, companies need to make sure their employees are consistently trained. Many times, particularly in hourly nation-type environments, supervisors will unequally train their staff as they may not remember who has learned what, or may simply be around one employee more than another. Employing a talent management system will greatly reduce inconsistencies in training, giving hourly workers equal amounts of attention thereby increasing overall job satisfaction and decreasing unwanted turnover.

Finally, organizations need to utilize a robust cloud-based system for performance review purposes. Hourly employees need just as much attention as their exempt counterparts, if not more. Studies have consistently revealed that regular performance reviews significantly decrease costly attrition by addressing issues early on and by recognizing and rewarding outstanding performance. Onboarding, training and performance reviews are best handled through a talent management system. This ensures organization, consistency and accuracy, three factors that will certainly aid in decreasing turnover.

Recruiting, managing and retaining the hourly nation effectively will save organizations millions of dollars. JobApp Plus was built specifically around the Hourly Nation. It is the only talent acquisition and management platform designed with the hourly workforce in mind. talentReef is the leading cloud-based Social Recruiting and Talent Management System provider focused on the Hourly Nation across multiple service industry sectors. talentReef’s mobile Human Resources platform (Social Recruiting, ATS, Background Checks, Onboarding, Training, Scheduling, and Performance Management) streamlines how fast-paced operators find, hire, and manage their valuable workforce.

Citations:

Taken from: http://go.evolvondemand.com/rs/evolvondemand/images/Evolv_2013_Q3_WorkforceReport.pdf on 2/1/15.

Taken from: http://www.workforceinstitute.org/wp-content/uploads/2008/02/Intro-to-book07.pdf on 2/1/15.

Taken from: http://humetrics.com/wp-content/uploads/2013/07/How-to-Find-Recruit-the-Best-Hourly-Workers.pdf on 2/5/15.

Holtz, S. (2013). Hourly Workers on Social Network Stay Longer, Sell More and Complete Customer Transactions Faster. Taken from: http://holtz.com/blog/blog/hourly-workers-on-social-network-stay-longer-sell-more-and-complete-custome/4102/ on 2/20/15.

Krauss, A.D. (2010). Starting Them Off On the Right Foot: Why Onboarding is Important. Taken from: http://www.tlnt.com/2010/10/12/starting-them-off-on-the-right-foot-why-onboarding-is-important/ on 2/20/15.