Hourly workers report poorer mental health, less meaningful work, and less faith in their leaders.
By Ted Kitterman and Chandni Kazi
Hourly workers at the typical U.S. organization are having a worse employee experience than their salaried colleagues.
In a Great Place To Work® market survey of nearly 4,200 full- and part-time employees, hourly employees found less meaning in their work, experienced less psychological and emotional well-being and were less likely to report fair pay and fair promotions.
These are crucial elements of a high-trust workplace culture, something that Great Place To Work research shows has a direct link to long-term profitability and resilience in an economic downturn. Male hourly workers are one of five key employee groups shown to have an outsized impact on how organizations respond to a recession.
If your hourly workers in general are having a bad experience, your organization is at risk heading into the choppy waters of 2023.
“Since a 25 cent raise is useless to me, it would be nice to have the option to convert that into PTO instead.”
Where hourly workers suffer
At the typical U.S. organization, less than half of hourly employees report:
- Fair pay for themselves and their co-workers (48%)
- Fair promotions practices (47%)
- Meaningful work (49%)
- A workplace that is psychologically and emotionally healthy and safe (48%)
In particular, hourly employees are having a worse experience than salaried employees when it comes to psychological well-being and meaningful work.
Fifty-eight percent of salaried employees at the typical U.S. organization report psychological and emotional well-being compared to just 48% of hourly employees. The gap is even bigger when it comes to reporting that their work is meaningful: 60% of salaried workers compared to just 49% of hourly workers.
These two experiences are critical when it comes to productivity and performance in the workplace. When you lack psychological well-being, innovation and productivity suffers. When your work doesn’t have meaning? You’re two to six times less likely to stay with your organization long-term.
“If I could change anything, it would be allowing employees to receive the proper training and support from [their] direct manager to be considered for advancement within the company."
What hourly workers need
In a 2021 survey of 188,000 hourly workers, Great Place To Work identified six ways leaders can make a difference for them:
1. Offer robust mental health resources.
Hourly employees are less likely than salaried workers to report having psychological and emotional safety at work. Those that do feel safe are two times more likely to say they have a great workplace culture.
Consider how mental health resources might not be reaching your hourly worker population. Do they know about your employee assistance program (EAP)? Do they have full access to benefits like free therapy sessions?
Employees know when they aren’t being valued as much as other workers at the organization. If they perceive leaders as unfair, they won’t invest their trust in the operation and mission of the company.
2. Make hourly work meaningful.
Meaningful work isn’t reserved for a handful of salaried workers in high-profile industries.
Great Place To Work research shows that any industry can offer meaningful work. For employees at the average company on the Fortune Best Workplaces in Retail™ list in 2022, 108% more workers report meaningful work than the typical retail workplace, a difference of 41 percentage points.
When hourly employees find meaningful work, they get invested in the organization. Hourly employees who say their work is more than “just a job” are three times more likely to want to work for the company long-term.
3. Ensure leaders embody your company values.
Credible and trustworthy leadership is the foundation of healthy workplaces. If hourly workers feel like leaders follow through on their promises, are approachable, and are likely to listen to their concerns, they’re less likely to disengage.
Per the survey, when hourly employees agree that leaders live up to company values, they are 50% more likely to recommend their employer to others.
4. Look beyond a college degree.
Hourly employees have a lot to offer, but often they feel overlooked in the organization when it comes to promotions and fair pay. One of the factors driving this disparity is the requirement of a college degree for jobs and pay levels within the organization.
When asked what their organization could do to become a better place to work, hourly workers often cited college degree requirements as limiting their participation. Rewarding tenure and service rather than a degree is seen by many hourly workers as more fair.
Degree requirements can have an impact on hiring and on diversity, equity, inclusion, and belonging (DEIB) as well. That doesn’t mean you should hire a chief legal officer without a law degree, but there are probably many roles in your organization that do not truly require a college credential.
5. Make raises meaningful — not just pocket change.
In the 2021 survey, many hourly workers reported getting very small raises — less than a dollar per hour. “Merit raise doesn’t cut it,” wrote one employee. “In the past six years I have basically had about a 65 cent raise.”
“A 50 cent raise a year does not offset the cost of living,” wrote another employee.
When hourly employees get excellent reviews and meet performance goals, but then only get pocket change added to their paycheck, they feel undervalued. “I am embarrassed to tell anyone that the large company I work for gave me a three cent raise,” wrote one employee, capturing how a failure to reward performance can eat away at workers’ morale.
Hourly employees who say their work is more than “just a job” are three times more likely to want to work for the company long-term.
Workers also report valuing other items more than a micro-increase in pay. “Since a 25 cent raise is useless to me, it would be nice to have the option to convert that into PTO instead,” wrote one employee.
However you choose to reward the hard work of hourly workers, make sure they feel like the reward is worth the hard work they put in to get it.
6. Invest in training.
When hourly workers are provided with training, they are more likely to feel supported and welcomed by the organization.
In the 2021 survey, hourly workers often cited training as a top way companies could improve the employee experience. “If I could change anything, it would be allowing employees to receive the proper training and support from [their] direct manager to be considered for advancement within the company,” wrote one employee.
The lack of investment in hourly employees might be due to a misconception about how long these kinds of workers stay with the organization. Why should companies invest in training for workers who won’t stay more than a couple of years?
However, the data suggests hourly workers aren’t temporary at all. Of the 188,000 workers surveyed, 20% reported working for their organization for more than 10 years and 15% reported a tenure of six to 10 years.
If more than one in three hourly workers are serving the organization for six or more years, they deserve training and investment so they can grow with the organization.
Chandni Kazi contributed original research for this article.
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