Despite reading of one layoff after another in the United States, and continued talk of recession, recruitment and retention of entry-level, hourly employees is still a concern. In many organizations, these employees are the backbone of the services provided or products produced.
Recruitment and retention of these employees requires a great focus of time. Getting qualified applicants to even apply is a challenge unto itself. The reputation of low pay and little chance for advancement has resulted in few applications and even less chance of retaining employees who become fully competent in the position.
The Institute of Management & Administration (IOMA) recently conducted a survey of Human Resource professionals throughout the country on this issue. The survey report focused on recruitment, hiring, retention, and overtime issues.
The non-profit sector reported their ability to recruit and hire entry-level hourly staff as the highest concern (58.0%). Wholesale / retail businesses came in a close second at 56.3%. The primary issue is a combination of the nature of the work and the low level of pay. This has resulted in many organizations increasing entry-level pay well above federal and state minimum wage levels. A billboard in Monroe, GA (between Atlanta and Athens) declares “Wal-Mart regional distribution center to open. Starting pay $10.50. No prior experience required.”
Non-profit and retail organizations are also turning to innovative programs to catch the eye of potential employees. Many non-profits look to formal career path programs and the guarantee of advanced training and education to attract entry-level employees. One non-profit healthcare client introduced a job enrichment program that provides an additional $1.00 per hour to employees while they are cross training to expand their capabilities.
Wal-Mart has taken the lead in offering innovative packages to attract entry-level employees. In a Southeast US community with a growing Hispanic population, the local Wal-Mart offers a starting, no experience wage of $9.00, and English as a Second Language and citizenship classes offered during work hours. Not only have they been able to attract workers to fill positions, but they have also made their mark in the local community as an organization that gives back. A winning combination.
The study next explored retaining entry-level hourly workers once employed. Anyone who has been to a grocery store or bought fast food has had personal experience with the impact of entry-level turnover. Many organizations spend a tremendous amount of time in training and developing staff that stay less than two years in a job. This retention issue can have a devastating impact on both the financial resources and the reputation of the organization. The financial impact of turnover has been reported to be from one-third to one-half of an employee’s annual salary. All has felt the impact on customer service.
In the IOMA survey, retention was cited as the largest concern by those in the banking and financial services industry (58.4%). Human resource professionals reported they are under increased pressure by senior management to increase pay levels to “fix the problem.” But it is not money that drives employees to leave. More often than not, these employees leave an organization due to lack of advancement and lack of respect. How they are treated by the organization in their first ninety days of employment has more impact on their decision to stay than their rate of pay.
The survey indicates that successful retention of these employees must be viewed as a comprehensive campaign comprised of many elements including
- starting rate of pay
- short-term pay advancement
- long-term career advancement
- development opportunities
- effective recognition and reward programs
- meaningful benefit choices
- the overall work environment.
All must be present, in one form or another, to ensure employee retention. The key is to send the message early on to these employees that
- the organization is glad they are here
- they have an important role in the organization’s success
- we want them to succeed
- our organization is worth coming back to everyday.
The third most important issue facing human resource professionals in addressing entry-level hourly compensation is controlling the use of overtime. The dilemma is when there are staffing problems, supervisors demand overtime of their staff. In the past, this level of worker would have viewed overtime as positive and a way to enhance their personal income.
Today, however, overtime has become less popular due to demands many of these workers have at home. Many are single parents who cannot work the hours requested. In many cases, the supervisor views this lack of overtime as a performance issue or as disloyalty, leading to increased tension in the workplace. Human resource professionals need to work with their supervisors when overtime issues arise to determine the best way to meet both the needs of the organization and the employee.
Effective recruitment and retention of entry-level hourly employees may be found in a better understanding of not only what the organization expects from the employee, but also of what the employee expects from the organization. Human resource professionals need to better understand the wants and desires of the population we are attempting to recruit. This may be a challenge if we are out of touch with their realities.
One very successful organization requires its recruitment staff to get involved in the community from which they recruit. By doing this, they discovered a competitive edge in attracting applicants – a large pool from which to select. It has also enhanced the reputation of the organization in the community and has led to favorable support from city, county, and state officials. A win-win for all concerned.