Your Path Coaching and Consulted is committed to helping Small Business Owners attract, develop and retain employees. If you are looking to improve your people management strategy, visit our website. Or click this button to schedule a meeting
Low-wage Workers Make Up a Significant Portion of the Labor Force
More than 40% of US labor force contains low-wage workers (Harvard Business)
Attracting and Retaining Employees Can be a Challenge
Companies facing the hardships of understaffing turn towards short-term incentives to fill in low-wage roles, such as sign-on bonuses or slight wage increases, yet why does turnover continue?
Employers' Beliefs Versus Survey Data
Common narrative regards workers as “fickle” people who constantly change jobs but the reality is that low-wage workers would rather stay with the companies that employ them.
Harvard Business Study surveys shows 51% of low-wage employees had remained at their company for over four years
62% say that a promotion or higher pay would motivate them to stay
9% say they would like to stay if the employer offered them more skills training
6% say they would like to stay if the employer offered them more responsibility
22% agreed with the statement, “Even if my company doesn’t offer me higher pay, skills training, and more responsibility, I would prefer to stay at my current company”
Changing jobs causes a disruption in a person’s life, which may not be a viable option depending on their financial situation.
No state offers a minimum wage that is in line with the living wage (CNBC)
181,891 low-wage workers studied in 2012 found 60% of them remained stuck in such positions five years later (Harvard Business)
Americans who are employed in long-term low-wage work tend to be Black or Hispanic, are more likely to be women, and have less than 12 years of education, the researchers found (CBS News)
Low-wage workers will stay at jobs longer if they have easy transportation access
But when people feel trapped, it has rippling effects on the business
Low retention
High absenteeism
Low morale
Low productivity
As temporary employees go in and out, more pressure is placed on long-time employees who stay. Eventually, they may burn out taking on extra responsibilities while management struggles with staffing
Low-wage workers are thought of as easily replaceable, but there is a cost to constantly recruiting and training people
“At most companies with which Good Jobs Institute has worked, employers are pouring the equivalent of 10 to 25% of their labor budget on replacement costs—the costs to recruit, train, and reach baseline productivity, only to start all over again when employees leave.”
Senior living, call centers, warehouses, retail stores, and restaurants have to replace their entire frontline workforce annually, with more than 100% employee turnover (TIME)
Programs that are working
Sam’s Club- reduced hourly workers’ turnover by 25%, productivity increased by 16%, customer loyalty increased by 7%, and sales grew by nearly 15%.
Quest Diagnostics- reduced hourly turnover by more than 50%- At Quest, overall costs decreased by $2 million, $1.3 million of which came from ideas from the reps
Mud Bay- Mud Bay reduced turnover by 35%, 12% higher sales per labor hour, and 25% higher sales per square foot (compared to the 9% industry average at the time)
Eligible employees, after 90 days, can enroll in Disney Aspire, which provides full tuition payment for a high school diploma, degree, or vocational skill
Of 14,000 hourly employees enrolled in Disney Aspire, 50% are working on a bachelor’s or master’s degree
3,500 have graduated since it started in 2018
2,800 graduates and students have been promoted internally
Of those enrolled in the program
50% are people of color
60% are women
The Path to Prosperity
If employees were set up for success from the beginning with full training, a livable wage, and support options for upward mobility, morale, and productivity would go up, and employees would be more likely to stay and grow within organizations.
Ensure Benefits are known
33% reported they were unaware of any opportunity to progress in their organization
Only 55% of workers reported they’d ever had a supervisor or mentor who helped them succeed
Your Path Coaching and Consulted is committed to helping Small Business Owners attract, develop and retain employees. If you are looking to improve your people management strategy, visit our website. Or click this button to schedule a meeting