What To Do about Hourly Turnover?
Hourly turnover, especially in a competitive talent market, can feel much like a revolving door. In an hourly work environment, the pay is low and the job isn’t all that “sticky.” (Unless you’re pulling gum off the bottom of dining room tables, or cleaning buttered popcorn from a movie theater floor.)
What we’re talking about here is the challenge of retaining employees in not-so-desirable jobs, or jobs that are easy to walk away from. That’s the reality for companies with large hourly workforces, like restaurant, retail, property management, manufacturing, call centers, and countless others. You can’t change the job, and often you can’t bump the pay. HR leaders in these industries have come to accept high turnover as a fact of life.
Maybe you can’t stop turnover at the hourly level. But what if you could slow it down? Stretching an hourly employee’s tenure from 30 days to 90 days can have a surprisingly big impact.
Think of it like this:
- You hire A, who stays for 30 days.
- You replace A with B, who stays for 30 days.
- You replace B with C, who stays for 30 days.
In 90 days, you’ve made three different hires. Now compare that scenario to this one:
- You hire Z, who stays for 90 days.
Here, you’ve only made one hire. Let’s say the cost of each hire is $2,000, conservatively. In scenario 1, you spent $6,000 in 90 days. In scenario 2, you spent $2,000 in 90 days. When you multiply that out across your entire hourly population, it adds up to big savings.
Here’s an example: A retail client of ours hires over 60,000 hourly employees per year. That’s 15,000 hires per quarter on average (not accounting for seasonality). Hiring people who turn over early (within 30 days, for example) could potentially triple this client’s number of vacancies from 15,000 to 45,000 per quarter. On the flip side, hiring people who are more likely to stay for 90+ days could reduce their number of vacancies from 15,000 to 5,000 per quarter. What a difference!
To learn more about hiring’s effect on turnover, as well as internal promotions and customer experience, check out our white paper: The Business Case for Hourly Assessments.
