By: Donna Fenn
Every business owner wants a highly motivated and stable workforce. When an employee jumps ship, workflow is disrupted, customers are often poorly served, and management is saddled with the distracting task of recruiting and hiring. Turnover is wildly also expensive; you've probably heard that an executive who walks out the door typically costs you 1.5 times her salary. But did you know that when you lose an $8 per hour employee, the tab is often $3,500 or more, according to the Society of Human Resource Management? Even more importantly, though, hourly employees hold the fate of your company in their hands -- they keep your machines running, deal directly with your customers, and have an enormous impact on your company culture.
Smart CEOs know how to use this to their advantage by focusing intensely on keeping hourly workers happy and thus engaged and productive. So how do you do it? Here's some advice from a few of the young business owners I featured in my new book, Upstarts! How Gen Y Entrepreneurs Are Rocking the World of Business and 8 Ways You Can Profit From Their Success (McGraw-Hill, 2009):
Keep hourly employees in the loop. Anderson Schoenrock, the CEO of ScanDigital in El Segundo, CA, says that early in his company's history, there was a "serious breakdown of communication" at his photo scanning company that led to lack of enthusiasm and motivation among his hourly workers. He quickly realized that he was to blame. "In the chaos of a fast growing start-up, I had forgotten to clue them in on the awesome big picture stuff that was going on. They were isolated and they lacked the information to even begin to know that they should be excited." So Schoenrock started having regular morning meetings to not only discuss the day's workflow, but new business development, marketing and public relations efforts. When employees could connect the dots between their own jobs and the company's performance, Schoenrock began to "see better results across the board." And the meetings gave him better insight into what his hourly employees needed to serve customers better and make work processes more efficient.
Make recognition meaningful. Monetary compensation is important, of course, but don't underestimate the value of non-monetary rewards. At Manhattan-based Rickshaw Dumpling Bar, servers sport white, gray, or black sweat bands according to their level proficiency. The color upgrades come with raises and responsibility for training others. Co-owner Kenny Lao also prominently features the drivers of his "Dumpling Truck" on the company's blog; it's great for driver morale, and it "humanizes" the truck for customers. At College Hunks Hauling Junk, a national franchisor of junk removal services, truck employees with the best performance record get nominated to the Hunk "Haul" of Fame and are featured on the company's website. "They also get bonuses for making the list," says co-founder Omar Soliman.
Be culturally sensitive. As the US workforce becomes more and more diverse, it's more important than ever for companies to make sure that they're in tune with the needs of all workers. Brian Adams, the CEO of Restoration Cleaners in Houston, TX, actually hired a professor of Hispanic culture to help him better accommodate the Hispanic workers in his dry cleaning plant so that he can attract and retain better employees. He offers them language training, but also shuts down the production floor for ten minutes twice a day so that the workers can take their breaks at the same time. "It's a very social and family-oriented culture," says Adams. He also encourages his employees to recommend family members when he has a job opening. "If I can create a happy working environment, they'll do more for me," he says.
Offer non-traditional perks. At College Hunks Hauling Junk, "hourly employees get to keep a lot of the cool stuff they find," says Soliman. The "Hunks" are often hired to remove old furniture and other household goods from attics and basements. "It's a great perk; most of our college employees have dorm rooms or apartments furnished completely by stuff they find on the job," he says. At TerraCycle, a Trenton, NJ manufacturing company that makes consumers goods out of "upcycled" packaging material like Capri Sun pouches, hourly workers can take home products that are "off spec" -- goods that function perfectly well but that don't make it past Quality Control.
Take the long view. If you really want to send your hourly employees the message that their long-term contributions are valued, you might consider following TerraCycle's lead. "Many of our longest standing hourly workers (those who have been with us one to two years or more) often get a small stock option package just like our salaried workers," says CEO tom Szaky. "Those who have received this package are not only positive and hard working but they inspire others by sharing the possibility of a similar reward with new employees."
Author Bio
Donna Fenn is the author of Upstarts! How GenY Entrepreneurs are Rocking the World of Business and 8 Ways You Can Profit from Their Success, and Alpha Dogs: How Your Small Business Can Become a Leader of the Pack. She is a a contributing writer at Inc. magazine. An expert on small business trends and entrepreneurship for more than 20 years, she is also a community leader on Work.com, a featured expert on SBTV.com and a blogger on Inc.com. For more information, go to www.UpstartsRock.com.