More than half of all U.S. workers earn their wages by the hour rather than salary. If you employ both types of workers, you probably spend more time filling hourly (rather than salaried) positions because turnover is three times higher for hourly vs. salary workers.
This employee churn comes at a high price, but high turnover for salaried workers can be just as costly. Replacing a manager, for example, can cost an employer the equivalent of 6-9 months’ worth of that position’s salary. Either way, you want to attract good hires who will stick around and add value to your bottom line.
As you consider how to recruit salary vs. hourly workers, you need to recruit effectively and hire carefully in both categories, even if your approach needs to be slightly different for each category.
Salary vs. Hourly Workers: What’s the Difference?
Salaried workers are paid at the same fixed rate at regular intervals regardless of how many hours they work. Hourly workers are paid only for the hours that they work (unless it’s a paid holiday or PTO). By law, hourly workers must be paid overtime if they work over 40 hours.
To prevent employers from paying all workers salaries and thereby making their positions exempt from overtime benefits, federal regulations determine whether a given position can be designated as an exempt (salaried) position. For example, most first responders and members of law enforcement cannot be designated as exempt salaried employees. Some states have additional guidelines governing which roles can be hourly or salaried.
Is Salary Better Than Hourly?
To some extent, hiring salaried employees rather than hourly workers can make it a bit easier to budget for labor costs because there will be less variability during times high and low demand. But, ultimately, the type of pay structure that is best for your company will depend on the particular role you are looking to fill.
As you make this determination consider whether your business’s labor needs fluctuate in predictable ways. Do you have a busy season and a slow season? If so, it may make sense to focus on recruiting hourly workers. If your business relies on the talents of highly specialized and educated professionals, then the top-fit candidates you’re looking for will likely expect you to offer them a structured salary.
Getting the Word Out
Consider adjusting your sourcing methods. For local businesses, this might mean shifting from solely placing job notifications on local web sites and job boards to instead contacting nearby high schools and community colleges, networking with local organizations, and letting your customers and business partners know that you have positions to fill.
As you interview your top candidates take note of where they heard about the opportunity and focus future recruitment efforts on those channels. All candidate sourcing channels are not equal, however, as employers report that the candidates they attract via social media tend to be of a higher caliber to those who they find via more traditional channels such as local newspaper ads or walk-ins.
Developing a Talent Pipeline
When you are between hiring periods, work to develop a talent pipeline so that you don’t need to scramble the next time you are down an employee.
If you don’t have a section of your website that encourages users to join your team, add one. If you have one but it’s been a while since you received any resumes through your portal, apply for a job to test it. It’s possible a technical issue has rendered your portal ineffective.
Make sure the “About Us” or “Join Our Team” section of your web site includes content and images showcasing your current staff. When you have an urgent hiring need, use your social media account to invite your users and subscribers to become part of your team.
By dedicating time to developing relationships with local organizations and institutions in your area that can recommend quality candidates, you can avoid panic hiring the next time you need to fill a position.
Targeting the Right Audience
Many employers assume that an hourly vs. salary position will only appeal to younger workers, and tailor the language in their job listings accordingly. This is a mistake. Nearly 80 percent of hourly workers are over 30.
Even a part-time role may be of interest to a more experienced worker for any number of reasons. The ideal candidate might be a younger worker looking to gain experience, someone returning to the workforce, or a retiree looking to augment their retirement income. The way you source and talk about your opening should reflect these possibilities.
Create a compelling job description that clearly communicates the benefits of your workplace. To make sure you target the skills each hourly position requires, talk to your current employees about the strengths they draw on most frequently to do their job well.
Interviewing and Candidate Selection
Include your top frontline talent in the interview process. Even if you decide not to have an hourly worker as part of your selection committee, or they’re too busy during working hours to sit in on interviews, you can, and should, ask your top-performing hourly workers for suggestions on what to ask candidates and the types of answers to look for.
You can even ask hourly workers to roleplay the types of challenges that come up in a typical shift. For example, if you’re hiring for a retail position, you might have one of your current employees play the part of a frustrated customer and have the applicant demonstrate how they would try to address their concerns.
Conducting Skills Tests and Checking References
Whether you’re hiring for hourly vs. salary roles, skills tests are often more reliable predictors of on-the-job success than more traditional hiring practices like interviews. Many small businesses are reluctant to invest in skills testing, but these services are becoming increasingly more scalable and affordable, and some are even cost-free.
When devising skills tests, make sure you are not asking candidates to provide you with uncompensated labor or assigning them a task that might result in you using their intellectual property without pay, as these practices are illegal and can damage your employer brand.
Finally, you can improve employee retention rates by running reference checks for your top candidates before you make an offer, using these conversations to help you make better hiring decisions.
As you consider whether a salary vs. hourly position is the right way to meet your company’s needs, you may need to implement slightly different hiring strategies for each. However, nearly all the best practices listed here can help ensure that you make better quality hires who stay with your company longer.
Leverage Your Knowledge to Hire Salaried and Hourly Employees With a Free Job Post
Now that you know how to recruit salary vs. hourly job applicants—including how to craft more effective job descriptions—spread the word and start interviewing top candidates with a free job listing from Monster.