In a post-pandemic world, workers are increasingly seeking out remote work opportunities.
They are looking for work where they can slip away to an appointment between virtual meetings or pick the kids up from school between emails. While it’s possible for many to find such an arrangement, a lot depends on the type of job you are looking for. It tends to be more challenging for the hourly workforce.
Based on data published by the US Bureau of Labor Statistics in July 2024, approximately 23% of employees work on a hybrid or fully remote basis,1 as can be seen in the first column of this chart.
In the following chart, when looking into the service and production occupations, the percentages of hybrid or fully remote jobs are significantly lower than the aforementioned 23%. Telework or work at home are not prevalent market practices, ranging from 1% in food preparation and serving related occupations to 11% in personal care and service occupations.
The hourly workforce powering the manufacturing, healthcare, and retail industries, however, does not enjoy the same luxury. Their responsibilities at work disproportionately require them to be on-site, compared to the salaried workforce. Only 15% of manufacturing organizations, for example, offer their hourly workers remote work options.2 This finding is supported by data reported by the US Bureau of Labor Statistics, which shows that among employees in management, professional, and related occupations across occupations, approximately 40% work on a hybrid or fully remote basis. In contrast, for employees working in either service or production, transportation, or material moving occupations, approximately 5% and 3%, respectively, work on a hybrid or fully remote basis (see Exhibit 1).
Despite the differences in work location, hourly workers express the same, if not greater, concern as salaried workers regarding balance between personal and work-related obligations. Mercer’s Inside Employees’ Minds Study revealed that approximately 23% of salaried individuals express concerns about the balance between personal and work-related obligations, compared to 35% for hourly workers (a difference of +12%).3
Increasingly, hourly workers are looking for flexibility in their schedules and worksite options to achieve balance (see Exhibit 1).
Work/life balance for the hourly worker
When asked about their work-related concerns, hourly employees consistently identify work-life balance as a top five concern.3 For those in healthcare, retail, and manufacturing, inflexible scheduling and inadequate paid time off prevent hourly workers from finding a balance between personal needs and obligations to their work. According to Mercer’s 2023 Inside Employee Minds Survey, half of all hourly workers are not offered a choice in the shifts they work or the ability to adjust their start and stop times, even if they meet their required hours. In addition, nearly one in three hourly workers do not feel that their paid time off is adequate to meet their needs in the case of a serious personal health condition, a family member's illness, or the birth or adoption of a child, or to support their mental health.
Far more than salaried workers, hourly workers are faced with a binary decision between personal and professional needs. Without formal flexibility options that give hourly workers ways to balance their personal and professional needs, employees are often forced to make a choice between work and family responsibilities. For example, hourly employees often have to make a choice between picking up their kids from school and arriving at their shift on time.
Strengthening flexibility policies to increase retention
The relative lack of formal flexibility options for hourly workers has a negative impact on their engagement. Whether because they’re forced to neglect their professional duties or sacrifice their personal well-being, without workplace flexibility, organizational productivity and employee satisfaction diminish substantially.
Recognizing these situations, employers across industries are beginning to increase flexibility in scheduling and expand paid time off. For example, 47% of healthcare clinical organizations are using flexible shifts as a creative hiring tactic.4 Retail organizations are able to offer flexible scheduling, depending on the type of role.
- Less than 40% offer flexible scheduling for the warehouse and distribution center or store/restaurant nonmanagement.
- Approximately 40% to 50% are able to offer flexible scheduling for store/restaurant management roles and ecommerce sales.
- Over 70% report that they can offer flexible scheduling for corporate roles.
Commitment, as shown by job retention, improved significantly among those provided with such opportunities. Retention increased by 27% when hourly workers could choose the shifts they work to meet their needs; 24%, when they could adjust their start and stop times; and 20%, when they could work a compressed work week, all while still meeting their required hours.3
In addition to offering flexible scheduling practices on as-needed basis, several organizations have succeeded in improving employee satisfaction and retention by implementing a compressed work week for all employees. One wholesale food provider, for example, ensures that their workers can achieve a proper work-life balance by allowing them to choose a 3-day or a 5-day work week.
Despite these data-based benefits, certain organizations are not yet structured to compress their work week for employees or to provide flexibility options. As a consequence, these employers risk limiting their access to workforces that are sitting on the unemployment sidelines because their current scheduling does not accommodate when these individuals can work.
Closing the gap: creating time for employers to clock in on hourly worker needs
With the average cost of turnover hovering between 50% to 200% of a worker’s salary, employers must assess the state of their hourly workforce to increase their retention and satisfaction.6 There are a range of innovative solutions specifically designed to address the unique challenges faced by hourly workers and enhance the work environment. These solutions are centered around promoting work-life balance, flexibility, and integration, ultimately empowering hourly employees to thrive in their professional and personal lives. Below are a few steps you can take.
- Provide employees with the ability to create a work schedule that aligns with their specific needs, considering shift times and days and/or start and stop times.
- Provide an adequate amount of time off for hourly employees that reflects the needs of your workforce, rewards preferences, competitive practices, and costs.
- Revisit and enhance your employee value proposition for hourly workers. Aligning total rewards offerings with a compelling EVP resonates with hourly employees. This comprehensive approach ensures that hourly workers not only receive competitive compensation and benefits but also feel valued, supported, and motivated in their roles.
Are you facing challenges finding ways to offer flexibility for your hourly population? Mercer has worked with many manufacturers, retailers, and healthcare organizations to identify the right way to provide flexibility to meet the needs of your unique organization. Give us a call at 855-286-5302 or email surveys@mercer.com.
About the Authors
David Kopsch, GRP, Senior Principal
David Kopsch is a Senior Principal Consultant in Mercer’s Career Business located in Atlanta, Georgia. David assists clients in retail, manufacturing, and financial services on a variety of topics, including career framework, skills and jobs design, and total rewards strategy for developing a compelling employee experience. His experience includes business restructuring and transformation for global organizations, benefits valuation assessment, and organization design.
Andre Rooks, Partner
Andre Rooks is a Partner at Mercer, where he is responsible for developing strategies that improve the outcomes from rewards programs. Prior to his current role, Andre was head of the Career Business for the Upper Midwest.
Abby Labow, Senior Analyst
Abby Labow is a Senior Analyst in Mercer’s Rewards Practice in Chicago. Her current work includes assisting clients in developing incentive plans, total rewards strategies, job evaluation and leveling, and compensation philosophy design.
Brennan Rees, Principal
Brennan Rees is a Principal in Mercer’s Detroit office, specializing in executive and workforce compensation, annual and long-term incentive compensation and plan design, and director compensation. Brennan’s consulting experience covers a broad range of industries with a particular emphasis on the tax-exempt sector, and more specifically, healthcare.
Sources:
1Bureau of Labor Statistics July 2024 Telework Tables from Current Population Survey.
2Mercer 2023 US Hourly Employee Policies and Practices – Manufacturing.
3Mercer 2023 Inside Employee Minds Survey.
4Mercer 2023 US Clinical Pay Practices.
5Mercer 2023 US RET: Retail Industry Compensation and Benefits Survey - Policy Report.
6Gallup 2019: This Fixable Problem Costs U.S. Businesses $1 Trillion