The Top Benefits for Hourly Employees

For decades, many hourly workers drew the short straw in regard to employee benefits packages, not enjoying the same perks as their full-time salaried counterparts. The benefits previously beyond the reach of hourly workers included paid vacation time and sick leave, retirement and health insurance benefits, opportunities for career advancement, and shift flexibility.

However, with 8 million job current openings in the U.S. but only 6.8 million unemployed workers, companies are fundamentally rethinking the way they attract, reward, and retain skilled employees, both salaried and hourly.

Offering comprehensive hourly employee benefits, such as financial wellness programs, flexible scheduling, and healthcare options, can give companies a competitive edge in attracting and retaining talent.

In this article, we’ll shine a light on some tactics that forward-looking employers are implementing to make their businesses the place that hourly workers want to work.

Understanding the Unique Needs of Hourly Employees

A recent survey turned the spotlight on the biggest challenges hourly workers face at work, the benefits they most value, and other factors influencing their decision to stay in a job.

The results indicate that hourly workers desire similar levels of flexibility and autonomy offered to salaried workers—the kind of perks they might get from gig work, which continues to lure many hourly employees away from their current roles. An overwhelming 96% of hourly workers cite schedule flexibility as the number one benefit. Interestingly, 52% of hourly employees said they would take a new job if it offered greater recognition and rewards.

Hourly workers are also increasingly feeling the long-term impact of high inflation, high interest rates, and limited purchasing power. Another study found that 21% of hourly workers are unable to cover their current living expenses, while 41% manage to cover their expenses but live paycheck to paycheck. Some 20% of hourly workers report needing multiple jobs to get by.

How to Create a Competitive Benefits Package for Hourly Employees

Hourly workers deserve quality benefits to enhance their livelihoods and make their jobs more rewarding and enjoyable. Ultimately, employee satisfaction is the ultimate goal. After all, the “future of work” belongs to hourly workers, too!

The best place to start in crafting a competitive benefits package for your hourly employees is by conducting research (for example, through online surveys or peer groups) to understand your employees’ needs. Next steps include:

• Selecting benefits that align best with their priorities.

• Offering flexible options within each benefit category, if possible.

• Clearly communicating your package to ensure employees have a complete understanding of all the benefits on offer.

Essential Benefits for Hourly Workers

1. Medical Insurance

Most employers don’t include medical insurance in their benefits packages for part-time hourly workers, as it is not required by law. In the long run, skimping on health insurance benefits can be detrimental to both employees and employers.

If an employee can’t afford to look after their physical health, there’s a good chance it will affect their ability to perform their job to the required standard. Low productivity levels impact a business’s bottom line, which is why it’s a good idea to at least partially cover employees’ healthcare costs.

2. Disability Benefits and Life Insurance

Imagine that you’re involved in an accident or are affected by a debilitating illness that makes it impossible for you to carry out your job responsibilities, either temporarily or permanently. Or, if you’re your family’s breadwinner, imagine for a moment that you were to succumb to a severe injury or illness. Just the thought of that is enough to scare most people.

We recommend that employers consider all the aspects of the working conditions within their industry in addition to federal and state law requirements when adding death and disability coverage to their hourly employee benefits package.

If employees have this coverage, they know that their employer will continue to pay a portion of their income until they’re fit to return to work. In the unfortunate event of their death, the employee’s beneficiaries will receive payment to fill the financial gap caused by the loss of their loved one.

3. Dental and Vision Coverage

Over and above health benefits, many employers offer dental and vision coverage to their hourly employees.

Dental insurance covers routine visits to the dentist for teeth cleanings, fillings, and minor surgical interventions. Dental coverage is generally less expensive than health insurance, so it’s a sensible option for employers and employees.

Vision coverage offers full or partial coverage for eye exams, eyeglasses, and corrective lenses.

4. Paid Vacation Days and Sick Leave

Now and then, we all need a day off. It could be to watch a child’s sports game, take an elderly parent to a medical appointment, or stay in bed to get over a nasty cold.

Unfortunately, too many hourly workers cannot take time off for these events because they’ll end up sacrificing their pay.

Why not formalize a certain number of paid days off for your hourly employees each year? You’ll reap the rewards in terms of their motivation and productivity!

5. Schedule Flexibility

For most businesses that employ hourly workers, the option of letting employees work from home isn’t feasible.

But there are other options.

Flexibility for these employees can take the form of less rigid work schedules, which gives people the freedom to work when it suits them.

Employers can also remain flexible by allowing employees to swap shifts through a platform like Payactiv Connect, if an unforeseen personal commitment or health issue arises. Additionally, many hourly workers will welcome the opportunity to pick up additional shifts from time to time, giving them a little extra in their pay packet that week.

6. Educational Aid

Most people have a desire to grow and better themselves personally and professionally. Many see continued education as a route to realize their dreams, but too often, the cost of studying is prohibitive. Educational aid can be a great incentive to offer employees.

This aid could take several forms: as the employer, you might offer to cover the cost of employees’ college courses or degrees. Alternatively, you could subsidize your employees’ professional training courses or certification exams.

If you have employees who show potential to grow and add value to your business, investing in their ongoing education is undeniably in your best interest – and of course, in theirs.

7. Earned Wage Access (EWA)

EWA allows employees to access the money they’ve already earned and avoid unnecessary high-interest loans, overdraft fees or late fees. Payactiv offers flexible options for accessing EWA funds. Funds can be:

• Loaded onto a prepaid or payroll card
• Transferred to a debit card or bank account
• Picked up as cash at Walmart
• Used to pay for Uber or shop on Amazon
• Used to pay a bill directly from the app

The best EWA providers have a free option for accessing funds, keep their fees to a minimum, and are not transactional in nature.

EWA is particularly relevant and valuable to lower-income, hourly-paid workers who live from paycheck to paycheck. Such individuals frequently find themselves exposed to situations where unplanned but significant expenses for childcare or healthcare can put family finances under pressure.

More Inclusive Benefits Benefit Everyone

No matter the types of hourly employee benefits and perks you settle on for your business, make sure that everyone in the organization is eligible to benefit from them. If benefits aren’t inclusive, low morale and underperformance may result.

Payactiv is the partner of choice for more than 1,500 businesses seeking to help their people fully engage in both work and life. Our all-in-one livelihood platform, takes a holistic approach to improving financial wellness and has helped employees save more than $400 million by avoiding unnecessary payday loans, overdraft and late fees.

Learn more about Payactiv’s Service, or book your demo now.

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