Hourly workers demand more from employers

Historically, hourly workers have been overlooked when it comes to advancements in employee benefits and experience, but now is the time for employers to get creative. (Photo: Shutterstock)

Hourly workers have borne the brunt of the economic challenges of COVID-19 and beyond. They were often the first to be laid off or furloughed because so many hourly jobs were incompatible with many lockdown restrictions (i.e. they require working in the physical world and interacting with real people face to face). Or worse, they were told they were ‘essential workers’ and made to deal with the stressful situation of being exposed to disease and an angry public.


Nico Simko is CEO of Clair, a financial services company that provides free on-demand paid access to hourly and on-demand workers. Nico previously worked in payments at JP Morgan and as an analyst at Goldman Sachs before co-founding Clair in 2019.

Now, however, the tables have turned and there are too many vacancies for too few applicants. Employees have the upper hand and, according to data from the Bureau of Labor Statistics, they know it. Since July 2021, the dropout rate in the United States has hovered around an all-time high of 3%. If that wasn’t enough for employers, industries like leisure and hospitality (where hourly employees make up the bulk of the workforce) are leading the charge for outings.

Related: 3 High-Value Perks for Attracting and Retaining an Hourly Workforce

While there has been much psychological and philosophical speculation about the drivers of this trend, these explanations cannot circumvent the hard economic fact that hourly workers see an opportunity to improve their quality of life at work and at home.

According to a recent study by PwC, the top four reasons employees seek a new job were: salaries, benefits, career advancement and flexibility. Employers who want to avoid an endless cycle of hiring and replacing talent should assess how they can be more competitive on all of these fronts.

Historically, hourly workers have been overlooked when it comes to benefits and the employee experience, but the time has come for employers to be creative and innovative in finding talent.

Higher wages alone will not be enough

While wages are predictably increasing among hourly workers in general, there are limits to what employers can afford to achieve. Moreover, there is evidence that recent increases in inflation are eating up much of these gains. Higher salaries alone aren’t enough, so you need to be creative and thoughtful about benefits as well. To provide financial benefit without breaking the bank, an innovative perk that many organizations are embracing is pay-as-you-go.

On-demand pay is a differentiator that gives employees greater flexibility in when and how they access their pay. In fact, according to a study by the American Payroll Association, 25% of employees want employers to provide on-demand compensation; this number is as high as 80% in another study.

Putting hourly workers in the driver’s seat of payroll frequency creates financial stability and reduces the need for employees to rely on predatory payday loans and check cashing services. It’s also a powerful differentiator for employers in desperate need of talent.

Breaking the benefits mold

In an increasingly competitive market, creating an unparalleled work experience by giving hourly workers the tools they need to improve their lives is more important than ever. Since traditional benefits aren’t available to hourly workers, organizations must look beyond payroll and healthcare to attract and retain talent. Providing those who traditionally don’t have access to traditional benefits the ability to access earned wages is an opportunity for employers to deliver value in a new way.

Pay-as-you-go breaks the mold of traditional benefits, providing employees with pay at the end of each workday. It is revolutionizing the way employees are paid. Instead of waiting a week or often two weeks, employees have access to their salary the day they earn it, which brings benefits to the modern economy.

Offer more autonomy and flexibility to your employees

When someone mentions flexible working, we usually imagine working remotely on the couch next to a laundry basket. In fact, some of you reading this article might be doing just that right now. But what does flexibility mean for hourly workers?

For years, the lack of control over their schedules and pay has been a major complaint among hourly workers. While schedules can still be uncertain, pay-as-you-go takes some of the uncertainty out of hourly work by reliably providing access to wages on the day they work. Addressing this longstanding complaint from hourly workers is a great way to increase engagement and differentiate your employment brand from those of your competitors.

Modern lives don’t follow the linear schedule of bi-weekly pay periods. That means pay-as-you-go is more than just a fun perk that some companies may offer to show they’re going above and beyond. On-demand pay is here to stay, which means employees will expect it, especially with their newfound power in this tight job market.

Today’s hiring market presents a huge challenge for employers hoping to attract and retain high-quality hourly talent. However, for organizations willing to adapt and embrace the reality of the situation, there are also profound opportunities to reposition themselves as employers of choice. Meeting employee salary expectations with pay-as-you-go is an easy way to make a difference in your employee experience.

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