Why Employers are Reconsidering Hourly Workforce Benefits
If there’s a silver lining to the coronavirus pandemic, it’s the significant increase in status that the world’s hourly workers have achieved. Hourly workforce and gig employees have discovered they have more leverage today regarding their work hours and wages. Sadly, that recognition has been hard-won. The next chapter in the story could center on the best way for employers to provide this majority segment of the workforce an employee experience that includes accessible and comprehensive well-being solutions, including programs and tools for mental health care.
Across the U.S. alone, non-salaried employees (people paid an hourly wage) make up 58 percent of workers, according to a 2019 study by the U.S. Bureau of Labor Statistics.
Hourly Employees are Valuable
Hourly employees have always been the unsung heroes of the global economy. They are the workers who show up and keep the wheels turning during the worst of times. They’re the frontline healthcare workers, firefighters, and police officers. But they’re also the people working on the production lines, driving the busses and conducting the trains. These hourly workers build houses, deliver packages, handle the behind-the-scenes tasks in restaurants, hotels, and retail stores.
Before COVID-19, the hourly workforce wasn’t considered “essential,” and those in many industries were treated like second-class citizens. Then suddenly, many of these same people were considered necessary for civilization to run day today. During the pandemic, nearly every state governor issued executive orders that defined “essential” industries. They include healthcare, food service, and public transportation. And their employees accounted for roughly 42 percent of the entire U.S. workforce in April 2020, according to the Brookings Institution. Among these, most are hourly or part-time workers, and 57 percent of them earn less than $20 an hour. In fact, essential employees earn an average of 18.2 percent less than employees in other industries, according to the Brookings report.
Nonetheless, many hourly workers are the customer-facing brand ambassadors for their companies. Their customer-facing job requirements made it impossible for many hourly workers to work from home when the global economy shut down. Instead, they were let go. According to the Economic Policy Institute, hourly, low-wage earners experienced 80 percent of the overall U.S. job losses in 2020.
The Needs of Hourly Workers
Now, it’s clear that COVID-19 has disrupted the entire hourly workforce landscape in other ways. Workers changed industries and realized that they could increase their pay significantly in new jobs. Also, as companies compete for a scarce pool of labor, wages are rising quickly. Many hourly workers are aware of this and are no longer wary of changing jobs for a better-paid position. Instead, they’re asking for better pay and greater benefits right where they are. That’s the impression of people like Alex Pantich, whose on-demand staffing platform Upshift is dedicated to the hourly and part-time workforce.
“In my experience operating an on-demand staffing platform,” Pantich said, “many of those working in the hospitality industry making minimum wage realized that they could work in a warehouse with better hours and a pay rate almost double what they made working in a restaurant.“
Research backs him up. Gallup reports that hourly workers are now significantly less satisfied than salaried employees. They are less satisfied with vacation time, retirement benefits, pay, safety conditions, job security, health insurance benefits, and more. A recent study by Workplace Intelligence and MyWorkchoice that included 2,000 U.S. HR leaders and hourly workers revealed that nearly 94 percent of leaders and 87 percent of hourly workers felt that hourly workers should receive the same, or some of the same, benefits as salaried employees.
Meeting Changing Demands
“We’ve reached a critical turning point,’’ the study concluded. “The evidence is growing that employers who want to remain competitive in today’s marketplace should consider rethinking their benefits for hourly workers, especially flexibility.”
Researchers with the hiring platform HireVue say competition is fierce for top hourly talent. Organizations are getting creative with benefits to attract high performers. A recent survey by the hourly hiring platform Snagajob found that 89 percent of employers are competing for talent using flexible hours and scheduling. Also, 76 percent are offering a robust set of employee discounts and 54 percent are offering increased job skills training.
“Other trends among hourly employers include signing bonuses, increased pay, and vaccination incentives,” says Mathieu Stevenson of Snagajob.
Employers who hope to attract and retain top talent will provide employees full access to wellness tools and programs. Roughly 40 percent of all U.S. adults reported symptoms of anxiety or depressive disorder during the pandemic. That is nearly four times the number who reported those symptoms in the first half of 2019. But the problem is even worse among essential workers. More than 42 percent of essential workers have suffered anxiety or depressive symptoms during the pandemic, compared with 30 percent among other workers.
To stay competitive, employers need to offer valuable benefits to all employees, regardless of hourly or salaried status.