The times when salary was the only way to motivate and praise employees have long gone. The modern corporate world has set new rules, which have introduced the notion of benefits.
Generally, this used to mean additional financial rewards in the form of a bonus, corporate discounts for a certain service, etc.
Today it encompasses much more, including even moral support. In this article, we will focus solely on the financial aspect of benefits.
The major shift to remote work and how it affects a benefits system
Typically, only full-time employees (or those who worked enough hours per week to be considered as full-time workers) used to receive rewards.
The major shift to remote work posed another challenge for companies: more employers have switched from a salaried employee to an hourly one.
Before moving on to the reward hurdle, it’s vital to understand who hourly workers are. The hourly definition means an exempt employee with a wage.
In other words, a company pays according to the number of hours per week/month an employee works for. A typical hourly rate example is $25 – the average number at the end of spring in 2020.
When it comes to the challenges associated with benefits, one hurdle is that they are rather costly. Referring to the Bureau of Labor Statistics, they make up about a third of the cost of an employee.
Basically, this means a 30 percent raise. It is a significant sum, especially considering the fact that employees’ wages are usually higher than their salaries.
Before companies were allowed to grant rewards to those who could be put in a full-time category, they relied on the Affordable Act Care and the IRS definition – an employee who works 30 hours per week or 130 per month on average.
The major shift to remote work and wages has changed the game.
The importance of external motivation is becoming more prevalent in competitive corporate environments, and therefore, everyone needs benefits.
How benefits boost employees’ performance
Some think that motivation is the responsibility of individual employees.
This means that no one can inspire and motivate a person without aligning with his/her inner intentions.
While this is partially true, studies prove that benefits do make a difference.
According to Gallup, engaged workers perform better. This, in turn, results in higher productivity and, consequently, profit.
Unfortunately, only every second person is engaged in their work.
Many of those who don’t are just looking for a reason for why they should immerse themselves deeper into their work. This is where benefits become an effective solution.
Basically, benefits are a way of saying, “We care about you”. This feeling of appreciation is likely to provoke the same in return. Although they may come at a high price, the cost of recruitment can be higher.
Studies show that companies with higher engagement experience less turnover. Since remote work with wages has become the new reality, this principle applies to hourly workers too.
With an increased demand for empathy and support during the pandemic, rewards have become more precious than ever before.
However, one point is vital to understand: once a company is going from hourly to salary, it shouldn’t reduce the size of a financial benefit.
This may undermine employees’ loyalty.
Traditional types of benefits an employer offers an employee
As has already been mentioned, today’s benefits encompass much more than a mere financial reward.
Workers seek understanding, compassion, and support. When it comes to materialistic points, the situation is much simpler.
Basically, the most traditional benefit is a bonus when a person receives extra cash on his/her payday.
This might be the result of hard work, outstanding performance at work, or long-term loyalty. In a word, an employer is the one to decide the reason for awarding a bonus.
As demands on employers have evolved, companies have started to introduce corporate discounts for goods or services. It doesn’t just apply to their own products.
For example, an organization covers 20 percent of the insurance or swimming pool costs.
The trend has improved. Now it’s normal for a reputable company to offer an insurance package or a free gym membership.
The common benefits include life or health and dental insurance, holidays and retirement plans, or paid time off.
Hourly employees deserve a specific approach
Hourly employee benefits can’t receive exactly the same rewards as those who receive a salary. The main point is to show appreciation and support.
Since exempt members of your team face quite different challenges, other approaches are required to deal with them.
One of the main problems they face is a volatile schedule. For example, a person can have 30 working hours in one week and 15 the next one.
This highly impacts employees’ wages. Therefore, he/she can face difficulties when it comes to covering basic needs like paying rent or bills.
According to some research, respondents want to work more hours. Obviously, the reason for this is a desire to earn more.
While almost half of the hourly workers claim to have 40 or more hours in their weekly schedule, 36 percent have between 21 and 39 hours.
This situation is likely to escalate during the pandemic. For hourly workers, coronavirus has become a major disruption. With the decreased operations activities, these workers are among those who have suffered the most.
If those receiving salaries experience a decrease in earnings, people without fixed, guaranteed pay probably find themselves on the verge of panic.
Obviously, companies shouldn’t pay wages if they don’t gain any income. This may result in bankruptcy. Nonetheless, they have the power to ease some of the difficulties of exempt working conditions.
What benefits are the most appealing for an exempt employee?
HR – especially, recruiting and retaining professionals – is becoming a new industry with significant competition.
A lack of talent in the labor market helps employers work out versatile retention strategies.
Benefits are one of the core elements. This applies to all salaried and hourly workers.
After all, why shouldn’t a company try to retain a qualified, exempt employee?
Financial benefits don’t always take the form of bonus cash or a discount.
For those who take wages, they make come as a predictive schedule.
This solves many problems – for example, an employee has a chance to plan through the week, organize child care and transportation.
Furthermore, such a schedule allows him/her to apply for another part-time job and make more money.
Another appealing benefit is on-demand pay. This means that an employer pays a wage once it’s requested, and doesn’t pay it on specific paydays.
Such a practice can potentially solve major domestic problems like covering bills or buying groceries.
It goes without saying that stressed employees show poorer performance compared to those who are worry-free.
If a person is on the verge of a personal financial cataclysm, he can hardly do his best at work – several studies prove that such fears decrease productivity.
These benefits don’t just help to boost employees’ efficiency, but also show compassion and empathy. Once a worker knows a company cares about him, he is more eager to give more in return.
It becomes a starting point for developing a deeper, more meaningful relationship between an employer and employee. Potentially, this can lead to better performance and enhanced loyalty.
The question do hourly employees get benefits is becoming irrelevant.
Whether you hire part-time workers for maintenance jobs or any other activity, benefits are an effective tool to boost productivity and decrease turnover, since they significantly increase employees’ engagement.
However, exempt members of your team require a different approach. A reward system is effective only when it makes their lives easier.
Thus, a company has to study its employees’ needs and find a solution to fulfill them. Please share your ideas on which benefits are the best for part-time workers in the comments.
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The author is a leading HR specialist in fortunacustomshop.com. She is a frequent speaker at professional conferences. Her main fields of study include such topics as employees’ retention, loyalty, and engagement. Recently, she has been studying behavioral patterns during the pandemic in order to understand how to effectively build a rapport in the new reality.