By George Waggott, founder, and Roberto Fonseca-Velazquez, law student,
George Waggott Law
A recent study from the Mercer consulting firm identifies a so-called "perfect storm" which is confronting workplaces today. As a result of economic pressures and less flexible working, the levels of employee engagement among hourly employees are declining, creating significant challenges for both employees and employers.
The recent Mercer study reveals a growing disparity in workplace satisfaction between hourly and salaried workers. While 78% of salaried employees report that they believe they are compensated fairly, only 60% of hourly workers share that sentiment. Similarly, 81% of salaried employees report being satisfied with their organizational approach to flexible work arrangements, compared to just 67% of hourly workers.
This discontent and divide within organizations is escalating. Since 2023, motivation among hourly workers has reportedly declined by 5%. This group’s satisfaction with flexible work and remote work options has also dropped by 5% during the same periods. At the same time satisfaction with employer benefits offerings and work-life balance satisfaction have declined by 5% and 4%, respectively. Additionally, the likelihood of hourly employees recommending their workplace to others has fallen by 6%. When taken together, hourly employees collectively report that they are less happy with their work and organization, in part because of a perception that they are being asked to work more in order to earn the same or less.
These factors are not only reducing morale but also contributing to higher turnover rates. A growing number of hourly workers are leaving their jobs due to difficult relationships with managers and colleagues—the Mercer study refers to an increase of 27% in workplace turnover rates since 2022. Poor engagement and workplace stress are contributors to employee attrition, which poses operational challenges for businesses that rely heavily on hourly staff.
Employer Strategies
Raising wages is an obvious solution, but for many employers, it may not be immediately feasible. In all cases, there are other meaningful ways to support and retain hourly workers. Mercer experts recommend the following strategies:
Introduce More Flexible Work Options: Even minor schedule adjustments or shift-swapping capabilities can greatly enhance job satisfaction for hourly employees.
Increase Pay Transparency and Financial Wellness Programs: Helping employees understand their pay structures and offering financial education resources can alleviate some financial stress.
Improve Benefits Communication: Many employees are unaware of the full scope of benefits available to them. Clearer communication about health care benefits, retirement plans, and other perks can improve overall satisfaction.
Use Feedback Tools to Understand Employee Concerns: Conducting regular surveys and feedback sessions can help management address issues before they lead to disengagement or increased turnover.
Create Upskilling Opportunities: Career development is crucial for engagement. Offering training programs and pathways for promotion can boost motivation and retention.
According to Andre Rooks, Partner and Career Business Leader at Mercer, career growth is a key driver of engagement. "Employees who feel that they can meet their career goals are twice as committed as those who do not, and with commitment comes engagement, motivation, and higher levels of productivity," Rooks says. However, many hourly workers struggle to find opportunities for skill development, which limits their potential for career advancement.
Key Takeaways
Employers who prioritize fair compensation, career development, and workplace flexibility will be better positioned to improve engagement and retention among hourly workers. While wage increases may be difficult in the current economic climate, businesses that take proactive steps to enhance job satisfaction will benefit from a more motivated, productive, and loyal workforce.
For more information about George Waggott Law, please see: www.georgewaggott.com, or contact: george@georgewaggott.com
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