The Growing Divide in Employee Benefits
Hourly employees are the backbone of essential industries like healthcare, retail, food service, and manufacturing. Yet, they often receive less comprehensive benefits, limited flexibility, and reduced financial security compared to their salaried peers.
A recent Inside Employees’ Minds survey revealed stark differences in how hourly and salaried employees experience benefits, career opportunities, and workplace flexibility:
- Only 63% of hourly workers can afford healthcare without financial hardship—compared to 83% of salaried workers.
- Only 60% of hourly employees believe they are fairly compensated for their work, versus 78% of salaried employees.
- Retail and hospitality workers reported a 9-point decline in satisfaction with their benefits compared to last year.
As employers compete for talent in an increasingly challenging labor market, HR and benefits teams must rethink their approach to supporting hourly employees. Organizations that fail to address benefits inequities and workforce well-being risk higher turnover, lower engagement, and difficulties attracting new talent.
Let’s explore how HR leaders can bridge these gaps, create a more equitable benefits strategy, and ensure a thriving workforce in 2024 and beyond.
1. Rethinking Healthcare & Benefits for Hourly Employees
The cost of healthcare remains a major obstacle for many hourly employees. While employers often provide healthcare benefits, many workers struggle to afford out-of-pocket costs or understand their options.
🔹 Key Findings from the Survey:
- Only 55% of retail and hospitality workers feel confident in their ability to afford healthcare.
- Just 58% of hourly workers believe their benefits are competitive with industry standards.
- Hourly employees lag behind on 16 out of 22 healthcare-related metrics, compared to salaried employees.
HR Strategies to Improve Healthcare Access:
✔ Offer Tiered Health Benefits – Consider lower-cost health plan options or employer-sponsored supplemental benefits to support low-wage workers.
✔ Improve Benefits Education – Simplify enrollment materials, offer one-on-one benefits counseling, and use digital tools to improve benefits literacy.
✔ Expand Preventive Care Support – Investing in telemedicine, wellness incentives, and employer-paid preventive care can reduce overall healthcare costs for workers.
🔹 Real-World Insight:
Retail and hospitality employees have the lowest benefits satisfaction scores—leading to higher turnover and disengagement. Employers in these industries must proactively improve healthcare access and affordability to compete for talent. (Read more at Mercer)
2. Addressing Pay Equity & Financial Wellness Gaps
Hourly workers are far more likely than salaried employees to experience financial stress, pay uncertainty, and retirement insecurity. Without transparent pay structures and long-term financial support, turnover and disengagement increase.
🔹 Survey Highlights on Pay & Financial Security:
- Only 60% of hourly workers believe their compensation is fair—compared to 78% of salaried employees.
- Higher-income hourly workers ($60K+) are 16 points more likely to believe their pay is competitive compared to similar organizations.
- Only 47% of hourly employees believe their employer is doing enough to help them prepare for retirement.
HR Strategies to Strengthen Pay & Financial Stability:
✔ Increase Pay Transparency – Ensure employees understand how their compensation is determined and how they can progress financially within the company.
✔ Implement Financial Wellness Programs – Offer budgeting tools, savings programs, and debt management resources to help employees gain financial security.
✔ Expand Retirement Plan Access – Providing automatic enrollment, employer-matching contributions, and financial literacy programs can help hourly employees plan for the future.
🔹 Real-World Insight:
Healthcare and retail workers report the steepest gaps in pay transparency and retirement confidence—leading to long-term financial instability. Employers must help workers understand compensation structures and retirement benefits to build trust and retention. (Read more at MarketWatch)
3. Expanding Workplace Flexibility for Hourly Employees
The rise of flexible work policies has transformed employment expectations—but hourly workers are being left behind.
🔹 Survey Highlights on Flexibility:
- Only 67% of hourly employees are satisfied with their company’s flexible work policies—compared to 81% of salaried employees.
- Satisfaction with flexibility has declined by 5 points for hourly workers since 2023.
- Retail and manufacturing workers report the lowest satisfaction with work flexibility.
HR Strategies to Improve Workplace Flexibility:
✔ Offer Predictable Scheduling – Stable and predictable work hours reduce financial stress and improve work-life balance for hourly employees.
✔ Allow Shift Swapping & Scheduling Autonomy – Providing app-based scheduling tools empowers employees to adjust their hours as needed.
✔ Reevaluate Return-to-Work Mandates – Frontline workers often face rigid in-person requirements, but offering hybrid or remote administrative roles can help increase flexibility in certain positions.
🔹 Real-World Insight:
Hourly workers in high tech and finance report higher satisfaction with flexibility, while retail and manufacturing employees struggle the most. Employers must rethink scheduling structures to improve retention and engagement. (Read more at Mercer)
4. Creating Clear Career Pathways for Hourly Workers
One of the biggest reasons for turnover among hourly employees is limited career advancement opportunities. Employees who don’t see a clear path to promotion or skill development are far more likely to leave for better-paying jobs.
🔹 Survey Highlights on Career Development:
- Only 58% of hourly workers feel their career goals can be met at their company.
- Higher-paid hourly workers ($60K+) are 18 points more likely to feel confident about career growth.
- Retail and hospitality workers report the lowest confidence in skills development and promotions.
HR Strategies to Strengthen Career Growth Opportunities:
✔ Invest in Upskilling & Training – Provide on-the-job training, tuition reimbursement, and certification programs to help hourly workers build new skills.
✔ Create Transparent Promotion Tracks – Develop clear, structured pathways for employees to move from hourly to salaried positions.
✔ Recognize & Reward Skill Development – Offer financial incentives for learning new skills and encourage internal mobility within the company.
🔹 Real-World Insight:
Retail employees often feel “stuck” in their roles, leading to high turnover. Employers that prioritize career development initiatives will have a stronger pipeline for leadership roles and long-term retention.
Final Thoughts: The Future of Hourly Workforce Benefits
Employers must rethink traditional benefits strategies to better serve hourly workers. Organizations that proactively address healthcare affordability, pay transparency, workplace flexibility, and career development will be better positioned to attract and retain top talent.
🔹 HR Leaders Should Focus On:
✔ Enhancing Benefits Equity across hourly and salaried employees.
✔ Implementing Predictable Scheduling & Flexibility for frontline workers.
✔ Creating Career Advancement Programs to reduce turnover.
At Atria, we help companies design benefits strategies that support ALL employees. If you’re looking to build a more competitive, inclusive benefits program, reach out today.
Contact Atria for a Workforce Benefits Consultation.