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Employee Retention: Employee Benefits For Hourly Workers

Employee Retention: Employee Benefits For Hourly Workers

By: Donna Fenn

In an economy that is still struggling to recover, it’s imperative for companies to make sure that every segment of their workforce team is firing on all cylinders. With the number of low-wage and hourly worker positions expected to rise, experts say increasing productivity and retaining top employees will be vital to US companies going forward.

“All other things being equal, companies that provide family-friendly benefits to their hourly workforce are more likely to have higher employee retention rates, lower turnover, and a stronger pool of talent that enables them to promote from within,” says Gaye van den Hombergh, president of Winning Workplaces, a not-for-profit that works with small and mid-size organizations to create great workplaces.

That echoes observations made by Working Mother Magazine, which just published its first “Best Companies for Hourly Workers” list. While the list highlights the efforts of large companies, like Best Buy and Marriott, many small companies also provide family-friendly benefits to hourly workers and are reaping the rewards of a more engaged workforce.

A Formula to Retain Hourly Employees

"We’re in a service business so we hire the best and the brightest,” says Jennah Purk, president of Purk & Associates, a St. Louis-based CPA firm. “If I have to take home less so they take home more then that’s what we do.” She has 15 employees, three of whom are hourly.

All employees who work at least 1,000 hours a year receive health insurance (including vision and dental) that is paid for 100% by the company. Her hourly workers also get paid holidays and four hours a month of paid “flextime” that accrues throughout the year. “We also have very flexible scheduling for everyone,” says Purk. “So many of our hourly and salaried employees work from home.”

The effect: Purk has retained all employees since she started the company with her husband, Bill, over a year ago; and her employees helped land the company recognition from the St. Louis Business Journal as a “best place to work” in the small company category.

Cultivating Employee Engagement

At Dorothy Lane Market in Dayton OH, almost all of the grocery stores’ 700 employees are full and part-time hourly workers. All have access to health insurance through the company.  But, according to Produce Director Dennis Chrisman, Dorothy Lane also has some innovative programs to keep health insurance under control.

“We hired two women who are experts in whole health and natural nutrition and we pay paid them to counsel any associate, full or part time.” Each employee is entitled to two hour-long sessions. All employees can also take advantage of the company’s vitamin program, which allows them to buy supplements for themselves and all family members for 70% off the retail price through payroll deduction. The company also will pay 50% of membership dues at one of three local gyms for all employees.

Lastly, Dorothy Lane has a “rainy day program,” designed to help out employees when they’re in serious financial need. The program is funded by the employees, who can opt to have fifty cents to a dollar deducted from every paycheck. “We just loaned someone $200 to pay an attorney’s fee,” says Chrisman. Employee turnover at Dorothy Lane is typically around 30%; the industry average is close to 100%. 

A Policy of Equality

Half of Paula Turner’s employees at Lexair Electronics are hourly workers and she feels strongly that “having everyone treated the same cements the team.” The Durham, NC electronics distributor provides all employees, most of whom are women, with paid time off and a highly flexible work environment.

“Our philosophy is that we work for the company but we also work for the customer and there are lots of different ways to go about that,” says Turner. “We have an employee whose husband has a lot of heart problems and she had to spend a week and half close to the hospital.  Instead of paid sick days, she opted to bring a laptop and work from her hotel room.”

Another employee who works in the warehouse also attends cosmetology school and is permitted to arrange her schedule around school demands.  Most of her employees are moms, says Turner. “I don’t ever want them worrying about how they’re going to go to the teacher conference and still eat lunch. They should be able to do both.”