The New Brutal Reality of Hourly Hiring

hourly hiring

Hourly hiring is the toughest it’s been in a decade! On any single day, there are millions of hourly jobs available in the U.S. In 2016, hourly job growth in the food and beverage industry outpaced broader economic job growth by 4X! There are so many hourly jobs available right now, the only reason not to have a job, at this point, is you flat don’t want to work!

A Cornell study recently found that the cost of turnover for one hourly position was $5,864. Lost productivity for each open position you have: $3,049. Total annual turnover cost per hospitality location: $146,000! Per location!

So, I know my true HR and TA pros in the industry will say, “Tim, it does NOT cost us $5,864 to replace an hourly worker!” I hear you. I lived that life. I know what you’re saying. The real cost of hire for an hourly retail/hospitality position in non-soft-HR dollars is probably more like $750 per position.

These studies, though, are smart. They dig into the costs that we don’t in HR. The cost of training. The cost of having an open position on sales and profit, from lower productivity, increased OT, etc. It doesn’t take long and those costs jump up quickly to $5,000 per backfill! Executives don’t like to talk these big numbers because their reality is these numbers are already built into operational expenses.

But, this is how TA and HR can look like rock stars when it comes to hourly hiring and retention. The real gross profit, net income number impact we have is going to be hiring a higher quality of candidate that will stay longer, produce more, and not keep us on a hiring treadmill of continuing to replace bodies. 29% of hourly restaurant workers stay in the job six months or less. That’s a huge drag on the profit of a location.

So, what can you do to have better hourly hiring? 

1. Start picking from a pool of higher quality hourly applicants. To do that you probably need some technology help. We constantly have people coming to us with interest, but in many cases, we don’t have the opening that’s right for them. So, they go away. Get hired by our competitors, etc. You need technology to keep yourself engaged with those pools of talent, so you can proactively tap them on the shoulder when you need them!

2. You have to invest in, and religiously use, assessments specifically designed for hourly hiring. Data clearly shows these have a huge impact in tenure, productivity, guest satisfaction, gross profit, etc.

3. Stop hiring warm bodies. This is such a reality for so many of your locations, and you need to help them get out of this cycle. This starts with hiring people who truly are fans of your brand. Many of your best employees are your best customers, or your best customers’ kids and grandkids. Find ways to tap into these pools by location.

4. Get your local managers and leaders involved in community organizations. The time they invest into these organizations will come back to them a hundredfold. Hourly hiring is about tapping into local talent pools. Community organizations are mostly untapped sources of some really great hourly talent, but unless you get involved you won’t be able to take advantage!

Every single day I have conversations with real TA and HR leaders who are all struggling to find and retain great hourly talent. Those conversations are all a variation of this –

“Tim, all I want is to find people who will show up each day they’re scheduled, come with some sense of customer service, act like they enjoy being alive, and able to work well with others!” 

I kid you not! This is an exact conversation! It’s a tough gig out there right now hiring hourly workers. Check out the SmashUps Video Cast next week when I’ll dig in deep to how organizations can get better at hiring hourly workers!

FOT Note:  We here at FOT like to think we get talent and HR at a different level. At the very least, we are probably going to have a different take than the norm. So it made perfect sense to ask SmashFly to be an annual sponsor at FOT, where they’ll sponsor posts like this one, allowing FOT contributors to write, without restriction, on all things related to recruitment marketing and how it helps organizations find, attract, engage, nurture and convert talent. To learn more about SmashFly’s Recruitment Marketing Automation Software for modern recruiting organizations, please visit the SmashFly website.  (Need help with your hourly hiring? Check out Smashfly’s hourly hiring solutions!) 

FOT Background Check

Tim Sackett
Tim Sackett SPHR, is the ultimate Mama’s Boy!  After 15+ years of successfully leading HR and Talent Acquisition departments for Fortune 500s and smaller technical firms, Tim took over running the contingent staffing firm HRU Technical Resources in Lansing, MI. Serving as the Executive Vice President, Tim runs the company his mother started over 30 years ago, and don’t tell Mom, but he thinks he does a better job at it than she did!  Check out his blog at www.timsackett.com. Because he's got A LOT to say, and FOT just isn't enough for him.

2 Comments

  1. Melissa says:

    Hey Tim!

    I really enjoyed reading your article, as I spoke to you earlier this year finding talent to work in Grand Traverse Region is tough especially front-line hourly positions. I’ve been doing research through my MSA class at CMU to explore into this issue; with unemployment at 3.6% last year it seemed as through we are in a good economy, however jobs soared to over 1,500 for the region +. Popular restaurants closed business down during Cherry Festival, VP’s were taking orders and literally it was pick-up a warm body – literally a company in the area found offered subsidized apartments and employed the area’s homeless. Here are some articles that I found to be helpful including local papers Glen Arbor Sun: Where are all the employees, The Ticker: Aging Population:

    – 2017 Northwest Michigan Works Employee Retention Guide
    http://www.networksnorthwest.org/userfiles/filemanager/5714/
    – Financial Intelligence from The Human Resources Point: A Conceptual Framework (2013) EGE ACADEMIC REVIEW
    – A Review of the Pivotal Role of HR in Business Management from the 1980s to the Present
    Employment Relations Today
    – Intersection of HR and Accounting June 2016 / STRATEGIC FINANCE
    – Harvard Business Review Analytics Review – Employer of Choice

    I look forward to hearing more about SmashUps Video Cast next week: how organizations can get better at hiring hourly workers.

    Sincerely,
    Melissa

    Reply

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