How to Use Diversity and Inclusion to Engage Hourly Employees

How to Use Diversity and Inclusion to Engage Hourly Employees

Hourly employees make up over 50 percent of the total US employee population and a critical segment of the workforce at many organizations. While employee engagement efforts typically focus primarily on salaried employees who are perceived as having more of a long-term commitment to the organization, hourly employee engagement and loyalty are growing concerns for HR leaders in today’s tight labor markets. According to recent Gartner research, hourly workers are more engaged in their jobs when they are satisfied with their employer’s diversity and inclusion efforts.

In the past year, we’ve seen many large companies launch new initiatives to better engage and retain their hourly employees, whether through education benefits or opportunities to work with local nonprofit organizations. HR leaders have also seen improvement of hourly employee engagement when these employees have positive perceptions of their organization’s D&I activities, our research finds. In fact, when hourly employees are satisfied with D&I, they exhibit almost twice the discretionary effort and almost three times the intent to stay compared to those who are not satisfied. However, only about half of hourly employees are currently involved with D&I efforts and HR leaders are uncertain how to use D&I to engage this population.

Our D&I research team has uncovered three ways HR leaders can leverage hourly employee engagement in D&I to make a positive impact on the organization:

Integrate D&I in Current Processes

HR leaders should integrate D&I efforts into pre-existing engagement initiatives, such as team meetings, to ensure that cultural values and behaviors are articulated and implemented consistently throughout the organization. This approach addresses a key challenge hourly employees face when connecting to D&I at their organizations: They do not feel included on their teams. By building hourly employee inclusion into existing processes, organizations can improve team performance without creating additional structures for HR to manage.

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Flexible Restaurant Recruiting Startup Pared Raises $10M

Flexible Restaurant Recruiting Startup Pared Raises $10M

Pared, an on-demand hiring platform for restaurant workers, has raised a $10 million financing round led by CRV, TechCrunch reported last week. The platform aims to help restaurants fill last-minute staff shortages, particularly in back-of-house roles like line cooks and dishwashers, but could conceivably be used for waitstaff and other front-of-house positions as well:

Restaurants go to the app and say they are looking for what the app calls a ‘Pro’ in whatever role they need, and are able to book the employee right away for the slot they have in their schedule. It might come at a slight premium over the typical hire, but restaurants are already willing to pay overtime in order to cover those gaps and keep things moving smoothly, [co-founder Dave] Lu said.

For employees, it’s a pretty similar experience — they see a job posted on the app, with a time slot, and they make themselves available for an hourly wage. The second benefit, Lu said, is that they can start to slowly make a name for themselves if they are able to prove out their skills and move up the ranks at any of those restaurants. The culinary community is a small one, he said, and it offers a lot of room to start building up a reputation as an exceptional chef or just finally get a first shot at a sauté position in the kitchen after working at the back of the house. That, too, might be part of the appeal of jumping on a service like Pared rather than just driving for Uber.

Pared is part of a growing ecosystem of platforms offering an “Uberized” approach to hiring hourly workers in various roles. By catering exclusively to restaurants and promising to help chefs build their personal brands, Pared is looking to build its own reputation as a reliable place to find quality kitchen talent on short notice.

These new platforms are emerging in retail and food service to address these industries’ unique staffing and scheduling challenges: Customer traffic is variable, but employees’ availability may not be. To address this mismatch, technological solutions are being built to help connect businesses in need of shift workers on short notice with employees willing to take those shifts, on the employees’ terms. For instance, Legion, another startup that raised $10.5 million in first-round funding last year, is using big data to better predict customer traffic and schedule the right amount of staff in advance.

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Costco to Raise Minimum Hourly Wage to $14 This Month

Costco to Raise Minimum Hourly Wage to $14 This Month

The warehouse club retailer Costco announced on Thursday that it was raising starting wages for its US employees by $1 to $14 or $14.50 per hour, effective June 11, while other workers will receive raises of 25 to 50 cents an hour, Seattle Times business writer Benjamin Romano reported:

The raise, to be paid for with part of Costco’s savings from U.S. federal corporate tax cuts that took effect this year, will go to upwards of 130,000 U.S. employees, costing the company about $110 million to $120 million a year before taxes, Costco chief financial officer Richard Galanti said during the company’s fiscal third quarter earnings report Thursday. … Costco competitors including Target and Walmart announced wage increases and bonuses for their employees tied to the tax cuts earlier this year.

“But not everyone at Costco is happy,” Romano notes:

Some salaried employees, including some in the company’s Issaquah corporate headquarters, say they’re being left out of the equation as Costco spreads around the tax benefit. One person, who asked not to be named for fear of retaliation, said after the wage increase announcement, “I would make a considerable amount more going back and gathering carts for the warehouse in the parking lot.”

Raising pay and benefits for entry-level hourly employees has been a growing concern for US retailers and other low-wage employers in recent years as the labor market has tightened, making even low-skill workers more challenging to attract and retain.

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How Can We Design Flexibility to Meet Different Employees’ Work-Life Balance Needs?

How Can We Design Flexibility to Meet Different Employees’ Work-Life Balance Needs?

In a meta-analysis of recent studies on flexible work policies, professors Ellen Ernst Kossek and Brenda A. Lautsch looked at whether these programs had consistent benefits for all types of workers: e.g., hourly or salaried, managerial or professional, and high- or low-income. Discussing their findings at the Harvard Business Review, Kossek and Lautsch register their dismay that in most of these studies, these distinctions weren’t even explored. “Despite the many studies on the topic,” they write, “it is rare for scholars to consider occupational differences across workers in the need for, and experience of, work-life flexibility.”

That’s a problem, the authors underscore, because employees in different roles and circumstances diverge significantly in terms of access to flexibility and other work-life balance programs, with varying consequences for their quality of life and work:

What exactly do we know about how kinds of work-life flexibility benefit employees in different jobs the most? First, not every employee faces the same work-life challenges, has access to the same types of flexibility, or experiences outcomes from them in the same way. For example, retail, food, and other workers in hourly jobs that pay at or close to the minimum wage often struggle to get sufficient predictable (and sometimes enough) work hours to care for their families. They would benefit from being able to control their work hours through flex time and having greater control over schedules and time off, as well as the ramping up of hours when it fits their lives. Yet these are the workers who rarely have access to control over when they work.

In addition, access to other work-life flexibility practices that affect the ability to take time off and the continuity of work, like paid sick and parental leaves, is critical to these hourly workers. It is also largely unavailable to them.

These authors’ point about how employees differ in their work-life challenges and the kinds of benefits they need resonates with something we’ve observed in our research at CEB, now Gartner, over the past several years and that is coming into ever greater focus in our ongoing work: Work-life balance is a broad category of need, for which no HR department can possibly design a one-size-fits-all solution.

Last week, we hosted Genentech’s Head of People Analytics Chase Rowbotham for a webinar. One of the projects he described was an analysis his team did to understand the effects of commute times on employees’ likelihood of leaving. Based on those findings, Genentech is rolling out a new “Working Flexibly” philosophy and toolkit, among a series of initiatives geared toward improving the employee experience. It’s intentionally a philosophy, not a policy, precisely because of this variation in what working flexibly can and should look like for different segments of the workforce. (CEB Corporate Leadership Council members who missed the webinar can watch a replay of it on our member site.)

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Is Benefits Equality the New Frontier in HR as PR?

Is Benefits Equality the New Frontier in HR as PR?

Over the past two years, we’ve seen a growing number of organizations leverage their HR strategies as a means of enhancing their employer and consumer brands simultaneously. The idea behind this “HR-as-PR” strategy is to make the organization more attractive to candidates—a growing concern in a tight labor market—while also cultivating a reputation among increasingly values-focused millennial customers as a progressive or socially conscious company.

Viewed through this lens, Rent the Runway CEO and co-founder Jennifer Y. Hyman’s recent op-ed at the New York Times illustrates the emergence of a new theme in HR as PR: ensuring that different classes of employees enjoy equal access to benefits like parental leave:

Like so many companies before us, my company, Rent the Runway, had two tiers of workers. Our salaried employees — who typically came from relatively privileged, educated backgrounds — were given generous parental leave, paid sick leave and the flexibility to work from home, or even abroad. Our hourly employees, working in Rent the Runway’s warehouse, on the customer service team and in our retail stores, had to face life events like caring for a newborn, grieving after the death of a family member or taking care of a critically ill loved one without this same level of benefits.

I had inadvertently created classes of employees — and by doing so, had done my part to contribute to America’s inequality problem. …

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Activist Investors Step up Pressure on Companies to Expand Parental Leave

Activist Investors Step up Pressure on Companies to Expand Parental Leave

Last autumn, the Boston-based investment firm Zevin Asset Management led a investor push at Starbucks to pressure the coffee chain into expanding its parental leave benefits for hourly store employees to match the more generous policy available to salaried corporate employees. In a shareholder resolution, Zevin requested that Starbucks’ leadership tell its investors whether this discrepancy might constitute employment discrimination.

In January, Starbucks announced that it was expanding its parental leave benefits, as well as adding paid sick leave, for hourly employees. While the changes do not equalize the offerings for salaried and hourly employees, they will make parental leave available to many store employees who were not able to take it before. Zevin considered that a victory, and they and other activist investors have since been pushing for similar changes at other large US employers, Rebecca Gale reports at Slate:

The Starbucks shareholder resolution on paid family leave was the first of its kind, and it has proven so effective that socially responsible investing firms such as Zevin are gearing up to put more shareholder resolutions in place for companies that have unequal paid leave policies, citing the need for what they call “better human capital management,” i.e. better meeting the needs of workers, which they think will yield better long-term results for the companies. And Zevin has the close-knit group of socially responsible investment firms in Boston that regularly meet to learn about issues and connect on ideas to make it happen.

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The 20 Largest US Employers Now Offer Paid Parental Leave

The 20 Largest US Employers Now Offer Paid Parental Leave

The major home improvement and appliance retail chain Lowe’s announced in a press release last Thursday that it was introducing a paid parental leave benefit for full-time employees, both salaried and hourly, as well as expanding eligibility for its health insurance plan:

In addition to the company’s comprehensive benefits program, eligible full-time hourly and salaried U.S. employees will qualify to receive:

  • Ten weeks of paid maternity leave and two weeks of paid parental leave.
  • An adoption assistance benefit to cover up to $5,000 of expenses related to agency, legal and other fees.
  • Eligibility to enroll in health benefits sooner, as early as the first of the month following 30 days of service.

Lowe’s also announced one-time cash bonuses of up to $1,000 for its more than 260,000 hourly employees, as some other large US employers have done in response to the substantial cut in the corporate tax rate passed by Congress in December.

The chain’s new leave policy, which goes into effect May 1, means that the 20 largest private employers in the US now offer some form of paid parental leave benefit, the New York Times‘ Claire Cain Miller observes:

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