Smiling hourly worker

Hourly employees make up the majority of the US workforce. Yet it seems that most companies are neglecting them. A Gallup survey of job satisfaction found that hourly workers were unhappier than their salaried co-workers about just about everything, from their benefits to their pay to their job security.  

This isn’t just unfair, it’s short-sighted. Hourly employees are the heart of many organizations. They are the retail workers, the customer service reps, the servers, nurses, programmers, and the front-line staff who are at the core of whether your business survives or fails. 

Read on to find out: 

  • Why you need to know how to motivate your hourly employees 
  • Why motivating hourly employees can be challenging 
  • How managers can motivate hourly employees 

What is an Hourly Employee?

An hourly employee is paid for the number of hours they work each week–unlike a salaried employee, who is paid a set wage no matter how many hours they work. As a result, their pay may vary from week to week, depending on the schedule set by their employer. 

In the US, hourly employees are non-exempt. This means that they are entitled to at least the minimum wage, as well as overtime pay. Hourly employees should receive overtime pay (usually time and a half of their hourly wage) if they work more than 40 hours per week. 

Hourly employees don’t usually have a work contract. Typically, they’ll punch in and and out using a time card or time management system to document their working hours. They also aren’t supposed to hold any management or decision-making responsibilities. 

Motivating Hourly Employees: The Benefits

When it comes to employee engagement, many companies make the mistake of focusing exclusively on their salaried employees. However, understanding how to motivate your hourly employees can have an overwhelmingly positive impact on your business. 

The benefits of engaging your hourly employees include: 

1. Reduced recruitment costs

Dannie Lynn Fountain, a Senior SWE Sourcer at Google, pointed out, “Hourly or part-time employees can sometimes have a higher ‘staffing cost’ than full-time salaried employees. They may work less hours, but it can take you just as long to find replacements.”  

Some companies fall into the trap of thinking of employees as interchangeable. This can happen more frequently with hourly employees, who may spend less time working for the organization and therefore not be seen as part of the core team. However, just as with any employee, a great hourly worker is worth far more than their salary, and they will be hard to replace if they leave. By developing techniques to motivate and engage your hourly employees, you will be more likely to hang on to your top performers. 

Michelle Hague, the HR Manager of Solar Panels Network USA observed, “Motivated employees are more likely to be positive ambassadors for your organization.” If your hourly employees are happy working with you, you will need to spend less on recruiting new hourly hires: “They’ll spread the word about your company and help attract new talent,” Hague said. 

2. Better working culture 

Fountain also remarked that investing in the well-being and satisfaction of your hourly workers won’t only benefit them–your salaried employees and your overall company culture will also benefit. “It shows that you as the employer value even the employees working the least amount of time. This contributes to an overall positive work environment, employee engagement, and culture.”

Your employees will all be interacting with one another all day, whether they are paid hourly or monthly. Treating every employee fairly is the only way to ensure that you have an inclusive and positive work environment.

3. Better company performance 

Mila Garcia, the co-founder and Hiring Manager at iPaydayLoans, points out that hourly workers are a fountain of knowledge on how your company works.

She said: “Hourly workers are a company’s main executors and because of that, they often have firsthand knowledge on how best to improve the day-to-day business processes. As such, it is often imperative to take what they know and make your hourly employees the main champions of change in the organization, which in turn can provide them with a sense of ownership that motivates them to drive the company forward and keep playing an active part in shaping that future.”

In other words, involving your hourly employees in helping to optimize your operations will not only be likely to motivate them, but also to help the overall performance of your business. 

How to Motivate Hourly Employees: The Challenges 

Some companies struggle to find ways to motivate hourly employees. For example, Hague says, “They may not have the same long-term goals as salaried employees.” After all, many hourly roles are entry-level jobs that have a high turnover rate. Therefore, hourly employees might not be motivated by the same opportunities for career advancement as their salaried counterparts. 

Another issue is that it can be hard to get to know hourly staff. Rotating shifts and irregular schedules can mean that managers may not build the kind of relationships with hourly employees that enable them to offer mentorship, coaching, or other forms of employee motivation

Finally, some companies may struggle to offer financial incentives to hourly employees. Often, the amount that businesses can afford to spend on per-hour labor is capped. Further, workforce planning teams are often under pressure to cut hourly staffing spend, especially in businesses like retail where labor accounts for 85% of controllable costs. Unfortunately, this may result in hourly workers feeling like they’re “not being valued as much as salaried employees,” cautions Hague. 

How to Motivate Hourly Employees: Motivation Techniques for Managers

Start by getting to know your hourly employees better

Research shows time and again that employees are motivated by 6 key drivers: 

  • Rewards and recognition
  • Opportunities for learning
  • Interpersonal engagement 
  • Role responsibility and accountability
  • Organizational vision
  • Social purpose

However, the importance of each of these drivers is different from person to person. “What motivates one employee may not motivate another,” comments Hague. “It’s important to take the time to get to know your employees and find out what motivates them.”

While that might be challenging with employees who are only working for short periods of time, there are many techniques that you can use: 

  • For instance, you might want to ask hourly workers to complete short employee surveys via smartphone to understand the benefits and perks that they most value. 
  • Compensate hourly workers for an additional hour once a month for a one-to-one check-in with their line manager to help them set goals and identify training needs.
  • Offer an optional after-hours training workshop for any hourly employees who wish to attend, to explore motivation in the workplace and gain greater understanding of what they see as most important at work. 

“Essentially, motivating employees boils down to personal relationships between managers and employees,” argues Matthew A. Gilbert, a lecturer of marketing at Coastal Carolina University. 

Offer relevant benefits and rewards

While you may not be able to offer hourly employees exactly the same benefits as their salaried co-workers, it’s vital that they don’t feel short-changed when it comes to recognition and rewards. 

Here are a few benefits and rewards that will be highly appreciated by hourly workers: 

1. Good work-life balance 

Today’s hourly workers value work-life balance more than higher pay. To help, companies can create more stable schedules for their hourly employees. For instance, the Gap trialed a more stable scheduling procedure for retail workers, including: 

  • Eliminating “on-calls” (where employees are scheduled to work shifts that could be canceled up to 2 hours before the shift is due to start) 
  • Posting schedules 2 weeks in advance 
  • Creating more consistent schedules 
  • Allowing hourly employees to swap shifts without getting prior approval

The results? Sales increased by 7% and productivity went up 5%, resulting in an estimated $2.9 million in additional revenues. Workers with better work-life balance were more motivated, less stressed, and better able to provide high-quality customer service. 

2. Earned wage access

Scott Lieberman, the founder of Touchdown Money, suggests that “a powerful way to motivate hourly employees is with EWA (Earned Wage Access). This is more commonly known as same-day pay. Many people, and perhaps especially hourly employees, need their money quickly, especially in this inflationary period when bills are higher. Knowing you can get paid the same day that you complete work is highly motivating to many folks!” 

3. An employee rewards program

To create a unified workforce, you need to make sure that both your hourly and salaried employees have access to your employee rewards program. For starters, you’ll need to make sure that your employees who don’t work with a computer can access your rewards platform via mobile. 

A peer-to-peer recognition program can be a great way to motivate hourly employees. While it can be harder for managers to notice the extra achievements of hourly employees on a busy shop floor or bustling workshop, their peers are far more likely to spot extra effort or outstanding work. 

You might also want to consider allowing managers to assign extra perks or benefits (such as paid time off or a choice of shift) to hourly workers, in lieu of gift cards or other forms of compensation. 

Along with a formal rewards scheme, make sure that your managers also remember to show appreciation and recognition to hourly employees.Some people make the mistake of thinking that employee motivation is all about offering rewards and incentives,” comments Hague. “While these things can be helpful, they shouldn’t be the only focus. Employees also need to feel like they’re valued, appreciated, and supported.” 

One technique that may be appropriate with hourly employees is what’s known as “management by walking around.” Unlike salaried employees, who are increasingly likely to work remotely, many hourly employees are in customer-facing roles, and might appreciate a quick, casual word of praise from their manager.  A word of caution: getting this right might require manager training. A casual compliment or a quick check-in may be welcome, but employees could resent feeling micromanaged or spied on by their manager if this is not done correctly. 

Provide feedback and support  

Hague cautions that there is a tendency to overlook feedback when it comes to hourly workers: “Feedback is essential for keeping employees on track and helping them improve. Without it, employees can become demotivated and disengaged.” 

While you may not include hourly employees in a formal performance review, you should still make sure there are mechanisms in place for them to see their progress and identify opportunities for learning and development. Informal feedback more frequently may be more helpful than an annual review. For instance, you could use a mobile app to allow hourly employees and managers to share brief feedback after each shift. 

Create a career pathway 

For top-performing hourly employees, the opportunity to develop their career within the organization may be highly motivating. Start by building a career track for hourly employees to take on more responsibility and increase their hourly rate. You could also design a career pathway to move from an hourly role to a salaried position (such as a junior management role). To make this motivational for hourly employees, you’ll need to make sure that the pathway is transparently communicated to every worker. It’s important that your hourly employees understand the skills, knowledge, and behavior that they will need to move up within your organization.  

Motivating Your Hourly Employees is Always Worth the Effort

As the Gap case study shows, taking steps to provide hourly employees with a great employee experience is just good business sense. Motivated employees, both salaried and hourly, are more likely to go the extra mile, more likely to deliver better results, and more likely to stay with your company for the long-term. If you want to create a positive work environment for your whole workforce, you must develop a talent management program that benefits every employee, no matter what their working arrangements are. 

If you’d like our help building an employee reward program that will engage and motivate your hourly and salaried employees, we’d love to hear from you. You can request a free demo on our website here.