Managing hourly employees: 5 keys to success

Managing hourly employees isn’t just about schedules and timecards. For staffing agencies, it’s about leading a dynamic workforce that often serves on the front lines of your clients’ businesses. Whether you’re scheduling for healthcare, hospitality, or manufacturing, hourly workers play a critical role in your clients’ daily operations and customer satisfaction.

To help guide your clients to business success, you need to know how to address the unique challenges of managing an hourly workforce, how to optimize employee engagement, and which metrics to use to measure your retention efforts.

The unique challenges of managing hourly staff 

Managing hourly workers comes with different obstacles than working with salaried employees. This is often caused by fluctuating schedules, communication gaps, and limited growth opportunities. 

Here are three of the most common challenges staffing agencies face.

High turnover and absenteeism

Hourly positions typically see higher rates of turnover than salaried roles due to less predictability, lower wages, and inconsistent work schedules. According to a SHRM survey of more than 2,000 hourly workers, nearly half are looking for another job.

Absenteeism is also more common among hourly workers. Physically demanding jobs, limited schedule flexibility, and fewer disincentives for taking time off can all contribute to missed shifts. Over time, this can take a toll on work-life balance and employees' overall health and sometimes lead to more illnesses.

Scheduling complexity and last-minute changes

Scheduling hourly workers is not an easy feat. Between finding coverage for last-minute callouts, accommodating shift swapping, and managing staff scheduling preferences, creating and keeping an accurate schedule is complex. Staff may call in sick or simply not show up for work, and it can be challenging to avoid scheduling gaps or unintentional overtime hours.

Diverse workforce needs and motivations

Staff who work by the hour often have fewer opportunities for advancement. This can impact their job satisfaction, motivation, and morale. Workers may also feel a lack of job security or recognition for their work, which could lead to a desire to go elsewhere.

For schedulers, it can also be challenging to make sure the right people are placed in the right roles at the right times. With a diverse candidate pool, this means considering an employee’s skill level, tenure, past performance, and personal preferences, all of which can make optimal scheduling especially complex.

Strategies for optimizing hourly employee productivity

Unlike full-time salaried roles, hourly positions typically involve repetitive tasks, shift-based work, and time constraints, which can make it hard to find ways to improve performance. Here are a couple of effective approaches to increasing productivity without sacrificing employee happiness.

Try incentive programs and recognition  

Motivated staff work smarter and stay longer. According to a 2024 industry report, U.S. employees are 68% less likely to leave their jobs when positive employee experiences and recognition are embedded into their workplace culture.

To build morale, try implementing gamification by using points, badges, and leaderboards to turn work into a competitive and rewarding experience. Points earned can be redeemed for gift cards, cash, or work-related perks, such as lunch with a mentor on the leadership team or a VIP parking spot. 

Loyalty programs with big benefits can also keep team members on their A-game. For example, some companies reward points for various actions, like hours worked, referrals, taking on leadership roles, and bringing in new business. Points can then be traded in for an all-expense-paid vacation or other high-caliber prizes.

Of course, rewards don’t always have to be glitzy to be meaningful. If your staffing agency lets workers choose their shifts, giving top-performing staff early access to open shifts so they get first pick can also be an incentive. In addition to serving as a reward, this helps high-performing employees maintain better work-life balance and overall well-being, putting them at lower risk of burnout.

Create standard operating procedures (SOPs) and checklists

Clear documentation reduces confusion and minimizes errors. By outlining consistent, repeatable processes, SOPs ensure every team member knows how to complete tasks accurately and efficiently. This also shortens training time by removing ambiguity and guesswork.

Consider using checklists to maintain quality and accountability across shifts. Incorporating visuals, such as screenshots and diagrams, can be helpful for tasks that are easier to learn by seeing than reading and can also support different learning styles.

3 tips for building an engaged and motivated hourly staff

Keeping staff motivated is key to performance, especially when their roles involve repetitive tasks that may feel cumbersome or less meaningful. Here are a few intentional steps you can take to create a more fulfilling employee experience.

Continuous feedback and employee listening programs  

Open lines of communication are essential for staff engagement. They’re also essential for organizations like yours to understand where your workforce stands.

Try offering regular check-ins, surveys, and feedback loops to ensure hourly workers feel heard and valued. Pulse surveys can be especially helpful, as they're distributed more frequently to measure employee sentiment over time. This allows you to monitor changes and take proactive steps to intervene when needed.

Creating a two-way dialogue is also crucial for constructive feedback, so staff feel like their managers are speaking with them instead of speaking at them.

Career pathing and advancement opportunities  

Many hourly employees want more than just a paycheck—they want a future. And while offering skill-building sessions is a great start, it’s not enough to help staff realize their vision. 

Clear career pathways, mentorship programs, and internal promotion opportunities demonstrate to hourly team members that growth is possible. Even small steps like showing them how to handle a new responsibility can boost motivation and engagement.

Fostering inclusion, fair scheduling, and a sense of belonging 

A supportive work environment starts with fairness, respect, and a healthy mindset. Make sure your scheduling processes are transparent and consistent, and prioritize equal treatment across all roles. This is especially important if you use a shift bidding process to assign shifts.

Promoting inclusion, providing mental health resources, and fostering a sense of community all contribute to a workplace where everyone feels safe, seen, and empowered to do their best work.

Key metrics and KPIs for hourly workforce management

Once you’ve implemented a few strategies for better managing hourly staff, you’ll need a way to measure their impact. The right metrics and benchmarks can help you evaluate success and identify areas for improvement.

A few KPIs to consider include:

• Employee retention rate: The percentage of employees who remain with your company over a specific time period
• Turnover rate: The percentage of team members who leave your company within a given timeframe
• Labor-cost percentage: How much of your revenue or operating costs is spent on your workforce
• Overtime rate: The additional compensation you’re giving staff for working overtime
• Employee engagement score: The level of involvement and enthusiasm employees have for their work and the organization
• Employee satisfaction score: How content employees are with their jobs and workplace

Leveraging modern tools to streamline hourly workforce operations

Managing an hourly workforce efficiently demands the right technology. Solutions like workforce management software come with scheduling tools designed to simplify the process through automation and digital time tracking. These innovations help streamline operations, reduce manual tasks, and empower you to make faster, more informed workforce decisions.

Here are three impactful technologies that can transform the way you manage your hourly employees.

Predictive scheduling and real-time analytics

Predictive scheduling tools use historical data and demand forecasts to create smarter schedules that align staffing levels with business needs. This helps minimize understaffing and overtime while also giving team members advance notice of their upcoming shifts. 

When paired with real-time analytics, these tools provide instant visibility into labor costs, attendance trends, and productivity metrics, helping you adjust strategies as you go.

Early hourly wage access and financial wellness platforms

Financial stress can be especially prominent for hourly workers, who have less consistency in their work schedules and income. Early wage access tools let staff tap into a portion of their earned wages before payday, giving them more financial flexibility. When combined with financial wellness programs, these tools can help reduce absenteeism and distractions by alleviating financial worries.

Automated timekeeping and geofencing

Manual time tracking is time-consuming and prone to errors. With geofencing time clocks, you can make sure staff members are onsite when they’re clocking in, which helps improve accountability and the accuracy of hours worked. You can do this by implementing on-site time clocks or mobile workforce management systems. These tools also help maintain compliance with labor laws and simplify payroll processes.

Retain your hourly workers with a custom scheduling toolbox

Managing hourly employees is complex, but using the right tools can help. This is when Teambridge enters the chat.

Teambridge is a workforce management solution with customizable scheduling tools that let you create shift schedules more efficiently. By allowing staff to claim and swap shifts themselves via a mobile app, you can offer staff more flexibility while lessening your administrative burden. 

Teambridge also includes time tracking features with geofencing and automated attendance management to streamline payroll accuracy and ensure compliance. Meanwhile, its communication tools enhance real-time engagement and coordination with hourly teams.

Considering an incentive-based approach? Check out Teambridge’s Building Block for giving priority shift access to your top-performing staff.