New year, new payroll! Get 3 months free when you switch to Homebase Payroll.Get Started
New year, new payroll! Get 3 months free when you switch to Homebase Payroll.Get Started

10 ways to improve retention for hourly employees

Finding ways to keep your employees happy, engaged, and on payroll is particularly crucial right now. 

“The Great Resignation” phenomenon hit business hard last year, with around 4 million Americans leaving their jobs every month (and more than 4.5 million Americans leaving in November 2021 alone).*

The rate of quitting was especially high in sectors that pay the hour, including retail and hospitality. More than a year later, the impacts are still being felt. In fact, Gallup** found that replacing an employee can cost as much as twice their salary!

That’s why finding ways to keep your staff on board has never been more important. 

But boosting employee retention isn’t just about “how to stop people leaving”. It’s about improving their work environment and engagement, so they’re happier in their roles and don’t even consider leaving in the first place. 

And doing that effectively can feel like a major challenge for a small business that’s already struggling to find time to do everything.

So to help, we’ve laid out:

  • Why hourly workers are leaving their jobs 
  • Exactly how to measure employee retention
  • 10 of the best hourly employee retention techniques
  • The technology that can help make it all far easier to manage effectively

*Statistics from the US Bureau of Labor Statistics / Statista 

**Statistics from Gallup workplace study

Why hourly workers are leaving their jobs

Here are some of the major reasons why employees quit.

Not enough control over scheduling

Employees want to feel as though they have some sort of control over when they work if they’re contracted on an hourly basis. This differentiates an hourly-paid job from a 9-to-5, paid-monthly role, and could be a major reason they turned to hourly work in the first place. 

So if an employee feels as though they don’t have any control over scheduling, don’t get enough notice about their schedule, and are at the mercy or whim of a manager or other people’s schedules, they may become disillusioned and leave. 

Not enough flexibility to swap or pick up shifts

Just as employees like to have some control over their initial schedule, they also like to have the flexibility to swap or pick up shifts if needed. Life can get in the way, or staff may want to save some extra cash. 

If workers find their workplace has inflexible schedules that don’t fit their real-life needs, they are likely to grow resentful. They will feel uncared for and will be more likely to leave.  

Lack of growth opportunities

A good employee will want to continue learning. They may want to find ways to improve current systems or processes, gain certain qualifications or training certificates, or have their sights set on rising through the ranks.

Research from 2022 shows that “good training” to grow in their role is one of the top five things that employees look for in a new job.

Of course, you need your staff to stay focused on the job they were hired for, but failing to offer employees any growth opportunities will lead them to get bored or feel stagnant. This in turn may lead to lower productivity and standards, and higher numbers of staff quitting.

A desire for better compensation

If staff feel as though their work is undervalued and underpaid, they won’t stick around long. If they never receive any bonuses, if they feel shortchanged when doing overtime, or if their base rate of pay is just too low, they may be forced to leave. 

If employees have to work several jobs or a side hustle just to make ends meet, this could lead them to be exhausted, unfocused, or less productive at their workplace, and more likely to leave more quickly. 

Poor leadership and not feeling part of a team

Many shortcomings in a workplace can be overcome if staff feel part of a well-organized and friendly team. This helps staff feel part of something bigger, and like everyone is working towards a common goal. 

In contrast, if the workplace is disorganized, there is no wider mission or goal, teams don’t communicate or have a unified front, and there’s no employee friendliness or opportunity for interaction, they will likely feel disconnected at work. A lack of staff loyalty or any sense of a team can cause workers to leave without a backward glance.  

Lack of independence and micromanagement

Staff need direction and help, especially when they’re new, but micromanagement and failure to trust that experienced staff can work independently can be a major cause of resentment. 

Many staff want to take pride in their work, overcome challenges, and build expertise. If you’re constantly looking over their shoulder, it shows them that you don’t trust their ability, and cramps their capacity to learn. 

It also hinders good work, teaches staff to rely on (or fear) you for everything, and hampers professionalism, both internally and towards customers. As entrepreneur Dennis Bakke once wrote: “If you treat people like children, they will act like children.”

A lack of rewards and recognition

People understand that a certain level of effort is needed to get the work done. But even if it’s not always expected, everyone appreciates a little, well, employee appreciation. 

 

If staff regularly go above and beyond, or put hard work into their daily tasks and execute them well, but never get any employee recognition, this can have severely negative effects. They will begin to put less effort in, do work less well, and look elsewhere for a role that will make them feel more appreciated.

How to measure employee retention

There are some major key performance indicators (KPIs) you can use to track retention.

The most basic way to measure retention is to divide the total number of staff minus the number who have left over a given period. You can then divide that number by 100 to get a percentage. 

For example, if you had 100 staff from January to April, and five left during that time, you would calculate:

(100 – 5) / 100 = 0.95.

This means your retention rate for that period was 95% (making your turnover rate 5%). Anything above 90% for retention is generally considered to be a healthy percentage.

You could also drill down further to identify other issues.

  • Time period. For example, the first few weeks or months after a staff member joins. A low retention rate here could mean you have a problem with onboarding or welcoming.
  • Manager. Wild variations in staff retention between teams with different managers could indicate a culture or training issue.
  • Season. Depending on your business, you may find that certain times of year are worse or better for staff retention.
  • Department. Figuring out retention rates across different departments may give you more insight into varying areas of the business.
  • Seniority. If you find that more senior members of staff are leaving (or less senior ones are more likely to leave), this could be a clue as to how roles develop in your business.

10 best hourly employee retention techniques

A certain level of employee turnover is to be expected. Even the best workplace may find some of its top employees leave for reasons outside of their control (such as family priorities). 

In fact, 100% retention might even signal a problem. Staff could be stagnating, no longer looking for more opportunities, or aren’t leaving even if they’re unhappy, underperforming, or not a good fit.

And yet, whether your retention level is too high or too low, you can definitely improve the dynamism of your workplace with the following tips.

1. Offer a competitive salary

Staff may not stay forever due to pay alone, but it can make a major difference. As much as team members want to do a good job and join your company’s mission, the vast majority are ultimately there for the paycheck. 

So offering a rate that is higher than your nearest competitor (without eating into your profit too much, of course) provides a compelling reason for employees to join and stay. 

2. Celebrate customer appreciation 

Hourly-paid staff that work with customers or guests want to know that they’re doing a good job. Most will greatly appreciate the chance to hear positive reviews from the people they’re actually serving. 

Sharing good reviews weekly with your team can offer a real boost of encouragement and build confidence, as well as foster community among workers. They’ll connect more with the reason why they do their job in the first place, and feel encouraged as a team.

Olivia from the photo printing company Persnickety Prints (which uses the Homebase platform) says: “Being appreciated for the work I’m doing is something that’s really important to me. Our owner Shari does a really good job at showcasing how customers respond and how the things we do make a difference. That’s why I’ve stayed here so long. It’s really empowering for me.” 

Workplace communication platforms like Homebase make this easy. You can send a Homebase Shout Out on the messenger app to congratulate—and celebrate—a job well done.

3. Keep a good workplace vibe

If workers feel happy at work, they’re likely to be more resilient, open to learning, productive, friendly, helpful, welcoming to new hires, and stay on the team for a long time.

One way to improve this is to hire people who not only have the right skills, but also the personality and attitude to fit in with your existing team. This doesn’t mean you have to hire only similar people (in fact, doing that may mean you breach discrimination laws or miss out on fresh ideas), but ensuring that new employees will gel with your current staff is key.

Good communication is also central to building employee happiness. Using a messaging app on a platform like Homebase lets you increase transparency, ensure staff know what they’re doing, and let them chat together to build a community.

You could also conduct anonymous surveys to understand what a positive work environment would look like for them. 

In a similar way to celebrating customer appreciation, internal acknowledgment is also powerful. Highlighting good work and even giving a simple “thank you” at the end of every shift goes a long way. 

“The overall environment is very important,” says Melissa, at Illinois candlemaking company Scentcerely Yours (also Homebase users). “The owners Susi and Rob [Brucato] always compliment us and take time to thank us at the end of our shift. They also point out things they notice we’re excelling at. 

“Those little things in the way that they communicate with the employees make all the difference.”

4. Trust your team members’ abilities

The opposite of micromanaging and never offering staff opportunities for growth is to trust them and give them a sense of independence. 

Not only does this take tasks off your plate, but it can also improve business outcomes. Train staff well and respect their ideas, and soon you’ll be able to include them in your decisions. Ask them for new initiatives, respect their experience on the ground, and show that you respect their skills.

You may encourage a team member to take the initiative on something you hadn’t considered, or uncover a hidden talent you didn’t realize they had.

They’ll feel empowered, engaged, confident, and more loyal to you as a manager. This will lead to greater job satisfaction, making them far less likely to leave. 

Rachel at Scentcerely Yours says: “Feeling trusted by my employer…is a big deal. If they trust my opinion and include me in brainstorming, decision-making, and development, each day is fresh and exciting. It’s nice being a part of the success of the company.”

5. Offer a realistic amount of flexibility

Small business employees that work hourly are often juggling many responsibilities. Maybe they’re working more than one job, attending school, or managing childcare. This makes work-life balance and flexibility even more important if you want them to stick around.

Include them in scheduling decisions, such as by using Homebase’s collaborative scheduler tool, ask when works best for them, and offer as much flexibility as you can without causing disruption. 

Treat staff like adults and trust that they need flexible schedules for a good reason. They’ll respond well and feel much more loyal.

“I’m in school right now,” says Katie at Scentcerely Yours. “So it’s crucial for my employer to work around my class schedule and easily remember what my availability is.”

And, if a staff member regularly needs to change shifts, or is less available than normal, there may be something wrong. They may appreciate you checking if everything is OK, and may need more support (rather than fearing punishment).

This will improve company culture, loyalty, and respect, and reduce no-shows and churn overall.

6. Be authentic

Leadership isn’t about setting goals and letting staff execute them for you with no more input. It’s about being part of the team yourself and leading by example where possible. Check in with staff and take ownership of how they’re getting on. 

If staff see that you’re one of them and live the company values yourself, their respect for you will increase. They’ll also feel more part of the whole, and like a real team pulling together. 

If you’re expecting your staff to work extra hours, or navigate difficult challenges, show that you’re putting in the work too. Practice the values you preach, and be a major part of team communication, and you’ll come across as genuine, authentic, and trustworthy. 

This will foster trust and build a community that staff will be less likely to want to leave.

“Excellent leaders working together with their team,” says Melissa at Scentcerely Yours, when asked about what makes leaders authentic. “There really isn’t anything here that Susi and Rob are not willing to do themselves.”

7. Offer workplace benefits

Pay and community are great, but another way to build loyalty and make staff feel appreciated is through workplace benefits. 

Perks go beyond pay to make workers’ lives easier and offer them services and advantages that they can’t get outside of the team. This makes them feel special and valued, and gives them an extra incentive to stay. 

This should go beyond things they need to survive (such as basic healthcare), but also help them to thrive. Depending on the size of your company, and the means you have, you could include:

  • Free healthy breakfasts
  • Quality coffee and snacks
  • Private health insurance
  • Wellness packages or even mental health days off to prevent burnout
  • Extra paid time off and gifts for birthdays
  • Gym membership or discounted classes
  • Loans for good technology or sports equipment, or even a bike to ride to work
  • Major discounts or friends-and-family coupons on what your business offers

8. Ensure clear communication

Clear communication helps staff feel well cared for and part of a well-oiled team. 

If staff feel as though the business is poorly managed and haphazard, and that communication is sporadic and unreliable, they may feel like their career will be affected in the same way. They may also worry about the fortunes of the company, and want to “jump before they are pushed”.

You can use a mobile app to chat with staff—such as Homebase’s team communication platform—to communicate scheduling or timetable updates reliably, and have regular meetings with your team to update them on company developments. 

This promotes transparency and makes staff feel included. They know where they stand and what’s expected of them. They trust in your ability to provide continued employment, new opportunities, and respect their time and skills.  

9. Provide growth opportunities

A great way to retain employees over several years is to empower them with professional development opportunities, to help them further their career path”. You could: 

  • Help to fund new qualifications or certifications
  • Offer training for the next position up
  • Let them shadow more senior members of staff 
  • Give them goals to aim for, so they master their current role before climbing the ranks
  • Let them train someone else to take over their role as they move up 

This will show them that you trust their skills, want to invest time and money in their future, and see them as a long-term member of the team. It will also improve the employee experience, and stop them from feeling bored or stagnant.

This will boost productivity and standards, encourage new staff to join, and reduce quitting levels.

10. Make processes consistent and easy

Setting out clear, step-by-step processes for common tasks in your business helps employees know what’s expected of them and gives them confidence. It helps them feel supported in their tasks and gives them reassurance that the company is well-organized, productive, and focused.

For example, using a digital platform like Homebase for all document signings, shift changes, and scheduling helps keep things in one, easy-to-use place. It makes processes consistent and straightforward.

This removes any unsettling ambiguity from workers’ roles and also makes them feel more secure in their jobs, giving them less reason to look elsewhere or leave. 

Processes can also be open to evaluation and input from staff. If a process isn’t working, you can have a system whereby staff can make suggestions for alternatives. This helps the process feel collaborative and useful, rather than appearing to be a top-down, authoritarian approach.

How Homebase can help boost employee retention

A list of 10 ways to boost employee retention may feel overwhelming, especially if you’re a small business operating at capacity already. But using a digital platform like Homebase makes it much easier.

As an all-in-one management and team communication tool, Homebase lets you stay organized when it comes to scheduling, time clocks, and payroll, so you can focus on employee happiness and boosting morale via tools like team chat, and company perks.

This saves you time and money on hiring admin staff, leaving you more headspace and budget to make your workplace a great place to be. Homebase is available on desktop and mobile app, so you and your employees can keep track of everything wherever you are, giving them that much-needed flexibility too.

Homebase’s tools keep everything workplace-related under one digital “roof”. And, with its hiring and onboarding process systems, helps you streamline employee communication easily from day one, turning their first day into the first of very many more. 

Good organization, flexibility, authenticity, and communication are central to helping employees feel happier and more respected. Happier employees stay longer and work more productively. Saving you money, time, and stress—and helping your small business go from strength to strength.

FAQs about hourly employee retention

What is a good hourly employee retention rate?

A good hourly employee retention rate is around 90%. It depends on the industry, and your rate may also fluctuate depending on the season and department. You can calculate the rate by dividing the total number of staff minus the number who have left over a given period. Then, divide that number by 100 to get a percentage. A 99-100% rate isn’t always the best. It could signify a less-than-dynamic workplace. However, shooting for a high-but-not-perfect 90% is a good benchmark.

What can I do to retain staff if I can't pay them more?

There are many things you can do if you want to retain staff but can’t pay them more. Pay is only one factor when it comes to keeping staff on board. Engagement and happiness at work are just as key, if not more so. Tips include celebrating them for a job well done, fostering a transparent and happy culture through team-building, trusting staff to do their jobs, offering flexibility, extra perks, and ensuring great communication.

What are the best employee retention practices?

The best employee retention practices are those that look to improve employee engagement and happiness in the workplace. As well as offering a competitive salary, you can celebrate employees for doing a good job, and build up a supportive, happy workplace culture. Trust your employees, and give them a realistic amount of flexibility when needed. Clear communication, showing up as an authentic and empathetic leader, and offering perks such as well-being days or discounts on products also helps.

Related posts

12 modern employee benefits + non-traditional perks to keep your workers happy

Have you noticed small businesses like yours offering more perks and started to wonder if you should do the same?…

Read article

30 team survey questions to gauge employee engagement

You might think that employee surveys don’t suit the vibe of your small business. When you’ve only got a few…

Read article

Small business onboarding process: Best practices and 5 mistakes to avoid

When you’re a new small business owner or manager with limited time on your hands, your goal may be to…

Read article

Why it’s important to keep your employees happy (+ 16 ways to do it)

According to the US Bureau of Labor, 76.1 million workers aged 16 and older are hourly workers. That’s more than…

Read article

How to handle FLSA tip credit

If you run a business that employs workers in a tipped occupation, you’ve probably heard some rumblings about Fair Labor…

Read article

New hire training checklist and onboarding guide

88% of employees say they didn’t have a good onboarding experience. That shouldn’t come as a surprise when many businesses…

Read article
Create and share team schedules instantly with Homebase.
Plus, get 3 months of Homebase Payroll for free!
Try Homebase for free