What’s the Secret Sauce Behind Flexible Workforce Incentives?

Increasing numbers of businesses are embracing flexible working practices and initiating employee rewards and benefits programs, appreciating the role they play in boosting employee engagement, and reducing levels of absenteeism and staff turnover. But there’s a large sector of the population that’s yet to truly benefit from this welcome evolution in human capital management: hourly workers.

In this article, we’ll explore why this is the case and why it’s now more important than ever for companies that employ hourly workers to offer them greater levels of flexibility and meaningful rewards and benefits. We’ll also share some ideas on how businesses and HR leaders can achieve this through the creative and thoughtful use of technology.

But first, let’s understand precisely who we’re talking about:

Hourly Workers – Who They Are

In 2020, there were 73.3 million hourly wage workers in the U.S., representing around 51 percent of the total workforce.

Hourly workers are the backbone of the economy. During the pandemic, the importance of the work they do only became amplified.

But all too often, their dedication goes unnoticed and their accomplishments unrecognized.

The Financial Squeeze

Many employees who are paid hourly live paycheck-to-paycheck. This gives them little wiggle room when they’re faced with unforeseen personal expenses—a car that needs repairs, a broken appliance, unplanned medical bills.

According to the U.S. Financial Health Pulse: 2020 Trends Report, as of August 2020, more than two-thirds of people in America (approximately 167 million people) were “Financially Coping” or “Financially Vulnerable.” Among those, 22% said they worried their food would run out and 26% said they worried about affording their rent or mortgage over the past three months. The findings also highlight the gap in financial health between men and women – as of August 2020, just 28% of women were “Financially Healthy” compared with 40% of men.

Juggling Personal Responsibilities and Work-life Balance

A large proportion of hourly-paid employees work in service industries, such as leisure and hospitality, healthcare, and retail. Their jobs typically involve shift work. Unlike those in corporate desk jobs, they have little flexibility when it comes to taking time off to attend to family responsibilities (such as caring for an elderly parent or going to watch a child’s football game). In a corporate environment, most managers are flexible and accommodating as long as the work is getting done, but many hourly workers don’t get this option unless they’re prepared to sacrifice their pay.

Then there’s the issue of work-life balance. In a recent news article, this cook shared his experiences on how being an hourly worker threatened his personal happiness:

The Wheel Turns

In recent months, there have been encouraging signs that the balance is starting to tip in favor of hourly workers. That’s because the industries in which they work are facing unprecedented skills shortages.

For example, according to a July 2021 report from the Bureau of Labor Statistics, about 750,000 leisure and hospitality workers are dropping out every month.

With skills shortages at new highs, employers simply can’t risk alienating the hourly worker section of their workforce.

And this goes beyond increasing their rates. As we should learn from the above mentioned comments from the cook, hourly workers value much more than just their pay. Many hourly employees aren’t engaged, feeling like they’re not really part of the organization or that they’re simply “temps.”

The Way Forward

Clearly, the current flexibility and benefit and reward practices and protocols that organizations offer hourly-paid workers are no longer serving either party well (if they ever really did.) Now, more than ever, companies should be considering new techniques to attract and engage their hourly workforce if they hope to retain them.

Forward-looking businesses need to ensure that their benefits and reward programs appeal to employees with a broad range of personalities, skills, values, and financial requirements. A good place to start is by doing research within their own workforces. For example, what specific problems are their hourly workers facing? Which of these problems could the employer help alleviate?

Another constructive avenue to explore is having conversations with hourly workers about what rewards they’d prefer and giving them more flexibility and options in the makeup of those packages.

For example, you could start allowing hourly workers to see and access the wages and tips they’ve earned in real time – a concept known as Earned Wage Access (EWA.)

Payactiv: Operationalizing Flexible Workforce Rewards and Benefits

Payactiv is on a mission to help employers to help their people fully engage in both work and life with our all-in-one Livelihood platform. We take a holistic approach to improving financial wellness and increasing employee satisfaction. With Payactiv, you’re in a position to let your people:

Own their days: Employees can access what they’ve already earned immediately to pay bills or buy what they need. No loans – their money, in their hands. As the employer, you can customize payment limits.

Work towards financial freedom: With our budgeting, savings, and debt support and tools – all in the Payactiv app – your people are empowered to control their financial futures. This boosts both employee engagement and retention as it gives people a sense of certainty and control.

Stay in touch and engaged:  Non-deskbound employees can get company announcements, reminders, and alerts while they’re on the go via the Payactiv mobile app.

Flexible and real-time shift scheduling: Your employees get alerts when new or additional shift openings appear, which they can pick up  – with just a click on the app. You can also set up shift incentives (for example, paying out up to 65% of earned wages for additional shift work rather than the standard rate, which is around or up to 50%).

With Payactiv, it’s entirely possible to introduce flexible workforce rewards and benefits that cost nothing to your company but deliver immense value to your hourly employees.

Learn more about how Payactiv can help your business, or book your demo now.