A majority of hourly workers plan to quit their jobs in the next year in search of better work. Here’s how employers can get them to lean in instead.
Hourly workers are the backbone of the labor force
Did you know that more than 78 million people work in hourly jobs, making up 55% of the workforce in the U.S.? In fact, due to the rise in so-called “gig” work, the number of hourly jobs created now outpaces that of salaried positions. Hourly jobs can also serve as a critical on-ramp to the world of work, especially for young people.
That’s why, quite simply, hourly workers are the backbone of America’s economy.
And yet, the issues endured by hourly workers in more traditional industries are frequently overlooked. For example, one common misconception is that many hourly jobs are vocational or temporary and don’t warrant long-term investment.
“This viewpoint is flawed, as countless individuals have built stable, long-lasting careers in industries that predominantly offer hourly work,” says Sanish Mondkar, the CEO of Legion, which conducts a “State of the Hourly Workforce” annual survey of more than 1,500 hourly employees and managers to uncover insights and pain points related to hourly work.
The survey reveals the hard truth that many of these hourly workers, especially those from younger generations, plan to quit their jobs in the next year—a shift that will only continue to exacerbate the nation’s labor shortages. The challenge we collectively face, says Mondkar, is finding ways to turn hourly jobs into “good” jobs.
“From an employee standpoint, good jobs are those that offer career advancement, pay a living wage, and offer the opportunity to acquire new skills and experience,” he says, adding that hourly employees also have a strong desire for both recognition and fair treatment.
I connected with Mondkar for an email interview to explore more of the insights uncovered through his firm’s survey, especially around how we might be able to modernize hourly work to make it a viable career option for members of the younger generations.
A looming crisis
According to the Bureau of Labor Statistics, the number of people performing hourly jobs has grown from 73.3 million in 2020 to 78.7 million in 2022.
Mondkar attributes this growth to the rise of the gig economy and side hustles, which offer a convenient avenue for supplemental income, especially for those whose primary jobs fall short of covering essential expenses such as rent, car payments and groceries.
But there are also plenty of hourly jobs in more traditional sectors.
“In some locales, particularly small rural communities, hourly positions in grocery stores, restaurants, and convenience stores may be the only employment opportunities available, making them a necessity rather than a choice,” says Mondkar.
The sobering news is that the results of the Legion survey show that more than 62% of hourly employees plan to leave their jobs within the next 12 months.
The retail industry in particular promises to be hit hard, as 67% of hourly retail workers reported that they plan to leave the industry altogether.
“Retail hourly workers cited the lack of benefits, undesirable working conditions, and the lack of schedule flexibility as the three factors that make their jobs the most difficult,” says Mondkar. “Economic uncertainty has also negatively impacted the retail industry. Hourly employees cited a greater number of upset customers due to rising costs, increased tension across teams, fewer customers—which can impact earning potential for commissioned hourly employees, and increased theft.”
Bridging the hourly gap
Given the importance that hourly work plays in the economy, employers must adapt to the needs of workers or face the prospect of suffering through continued labor shortages.
However, many employers have been hesitant to invest in hourly positions, says Mondkar, often citing the need to maintain profit margins and keep consumer costs low. Such reluctance to address the needs of hourly employees can be counterproductive, leading to high turnover rates that ultimately elevate labor costs. The average expense of replacing a retail worker, for example, exceeds $3,200, including recruiting, training and the negative impact on productivity.
How then can employers adjust and rethink their approach to hourly work—especially when it comes to younger-gen workers?
One answer, says Mondkar, is to learn a lesson from the gig economy and embrace technology as part of the solution.
“For younger generations who have grown up immersed in technology, the integration of digital tools into hourly jobs is not just a perk, but an expectation,” he says. “They are fluent in internet usage, social media platforms, messaging apps, and various other communication technologies, yet many hourly jobs do not represent the evolution in technology that these younger workers expect. This disconnect between the tech-savvy personal lives of younger workers and the technological stagnation in their workplaces is something that must be addressed.”
The responsibility for bridging this gap, Mondkar says, falls not only on employers but also on innovators and regulators.
“Current workplace policies in some sectors may restrict the use of messaging technologies or other digital tools, hampering innovation and efficiency,” he says. “Such regulations need to be revisited and possibly revised to enable a more tech-friendly work environment that aligns with the expectations of a digitally native workforce.”
Modernizing hourly work
Mondkar says that weaving more technology into hourly positions can help address the key pain points that cause so many workers to shift jobs.
One of the most critical factors influencing turnover, for instance, is schedule flexibility.
“Empowering employees to have greater control over their work schedules can dramatically improve retention rates,” says Mondkar. “Implementing mobile apps and self-service features that allow workers to handle functions like time-off requests and swapping shifts without manager intervention can go a long way in boosting employee satisfaction.”
Another pain point for hourly workers is not receiving prompt payment following the completion of a work shift—which is now the norm in the gig economy. The discrepancy that exists between getting paid immediately for gig work and having to wait to receive a paycheck from working a more traditional hourly job is an issue for young people.
The good news is that this issue can also be readily addressed through software innovation like mobile apps.
“Immediate access to pay can contribute to the financial well-being of hourly employees, which in turn can lead to higher retention rates,” says Mondkar.
Using technology to collect operational data on hourly work can also help managers and hourly employees alike objectively assess performance in an automated and transparent way. That then opens up more opportunities to reward and recognize star performers.
“This data-driven approach can eliminate perceptions of unfairness or bias, thereby enhancing both managerial effectiveness and employee satisfaction,” says Mondkar.
A digital future
I did not grow up with a computer in my pocket. But young people today have. And that fact will continue to shape the way we think about work in this country, including the hourly positions that underpin so many industries. The lesson here is to find ways to lean into our digital future to make work more fulfilling and humane—for everyone.
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