Michael Spataro is the chief customer officer at Legion Technologies, an innovator in workforce management (WFM).
When considering the general workforce, many don’t think of it as being made up of two distinct groups: salaried employees and hourly employees. Oftentimes this “single workforce” mentality leads to business solutions that may work for one but do not translate or are not available to the other.
Case in point: In today’s economic climate, we’re seeing increases in salaried layoffs in certain industries like tech, while at the same time hearing about challenges in finding enough hourly employees to fill open roles in industries such as retail. It’s time for us to recognize these two unique workforces—and their unique challenges—for what they are and ensure we’re enabling them with the appropriate tools and resources best suited to their unique needs.
Temporary Employment Uncertainty Vs. Long-Term Labor Shortage
The labor market for salaried employees is experiencing extreme uncertainty; layoffs are rampant throughout the tech sector as companies make drastic changes to their operational infrastructure. However, while these layoffs have helped kick overall unemployment back to pre-pandemic levels, other sectors are still facing a labor shortage.
Businesses that rely on a large hourly workforce—such as the retail and hospitality sectors—are still in dire need of employees, but are having trouble hiring them as they opt for gig-like jobs or leave the workforce altogether. In fact, according to McKinsey and Company, the quit rate in retail and hospitality is the highest among sectors in the United States and is nearly two times as high as the national average.
While some companies with hourly employees are finding ways to make do with fewer people—like choosing to optimize portions of their labor supply chain—others are looking for ways to better attract and retain hourly workers. This includes adopting technology that leverages intelligent automation to offer employees greater schedule and pay flexibility, modern communication tools and instant access to earned wages.
Different Tools For Different Workers
Although 82.3 million Americans over the age of 16 are paid hourly and represent the majority of American workers at just over 55%, many conversations around workforce solutions revolve around the enterprise salary workforce. However, different work environments require different tools.
On the work flexibility front, salaried employees often have the flexibility to work from home or come into the office a few days each week. Hourly employees get flexibility by having schedules that match their preferences and the ability to easily swap shifts or claim open shifts. This impacts how employees communicate with one another.
For example, the salaried workforce has a variety of ways to communicate with their co-workers and senior management—such as company email accounts, Slack and Microsoft Teams—but these are usually not an option for the majority of front-line employees. In my company’s report, “Hour by Hour: Attracting and Retaining Hourly Employees and Their Managers”—which surveyed thousands of North American workers and their managers in 2021—my company found that 39% of hourly employees would leave due to poor communication with their employer. In the same way that companies look for communication tools for salaried workers, it’s important to consider clock-aware, workforce management solutions that can meet the needs of hourly employees. I recommend looking for those that provide two-way communication via mobile apps and offer built-in chat and news feed channels.
Additionally, many companies with hourly employees continue to use inefficient, manual business processes to support hourly workers. Managers are still relying on Excel worksheets to create schedules, which can lead to schedules that do not match business needs with employees’ skills and preferences. They are also using text and phone calls to communicate with their workers, which can result in a multitude of labor compliance issues if the manager contacts employees outside of work hours. Other potential labor compliance issues can occur with manual processes, such as a manager scheduling a minor for more hours than they are allowed to legally work. Choose tools that allow for automatic scheduling, which will align employee preferences with business needs.
The Role Of Labor Optimization In Business Success
Organizations with salaried and hourly employees both need to optimize their workforce for their business operations—whether that’s hiring (or letting go of) salaried employees, or creating schedules for hourly employees that meet their needs, as well as the needs of the business.
For those with hourly workers, optimizing labor means they must be able to accurately forecast customer demand so they can staff at the appropriate level. AI-powered demand forecasting solutions can predict demand across all customer touchpoints and locations and synthesize thousands of data points including historical data, ongoing operations and future events like weather and local events to create an optimal labor plan without human intervention. This allows employers to optimize labor costs by staffing the appropriate number of employees needed at any given location at any given time.
Additionally, by having the right number of employees, companies can help ensure workers aren’t overwhelmed with the amount of work they have or are unable to provide ample customer support. In turn, employers receive the benefit of increasing employee happiness, and therefore, offering an improved customer experience.
Employers have to overcome different hurdles for the hourly and salaried workforces; one-size-fits-all workforce tools won’t address their unique problems. Rather than force a solution for salaried employees on hourly workforces, or worse yet, fail to implement one altogether, it’s time to bring hourly employment into the future by providing them with the tools and tech they need. With the right support, businesses can optimize their operations and workforce while also delivering a greater employee experience.
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