Despite making up two-thirds of employees, hourly workers are often left behind—leaving businesses exposed to growing risks
“One out of every three workers is a salaried worker, and two-thirds are hourly workers. And yet so many HR policies, benefits, and training paths only cater to the minority,” says Nita Chhinzer, associate professor in the department of management at the University of Guelph.
The problem Chhinzer describes is not just philosophical—it’s structural. McLean & Company’s latest data confirms that 36% of hourly employees feel their organization lacks a clear development path for them. That’s over a third of the workforce left uncertain about their future at a time when retention, engagement and skills development are critical to business success.
The issue starts with how policies are framed.
“For example, vacation policies often say, ‘for every year that you work, you're entitled to two weeks of vacation,’” she says. “That assumes the person has an annualized salary. It doesn't frame it in a way that the hourly worker can make sense of it.”
Chhinzer says it’s more useful to express vacation in terms of percentage-based entitlements—like 4% of pay—and explain how and when that can be accessed. This ties in with how risk is distributed – one common scenario being when a salaried employee requests a week off, and the employer allows it, even if the entitlement hasn’t been fully earned.
“Companies are essentially shifting the risk of employment to employees—and hourly workers are assuming the risk,” Chhinzer explains. “We assume that the relationship [with salaried employees] is a longer-term relationship, [but for hourly workers], [an employer] might be fearful of giving them a full week off because they haven't earned that yet, and if they quit, there's no way for me to recoup that extra 3.5 days.”
The consequences of this imbalance show up across the employee experience. Hourly workers often struggle with unclear policies on shift cancellations, break times and escalation procedures. This is compounded by the timing of their shifts—often outside the core 9-to-5 hours—when managers and support staff are less available.
“It actually makes hourly workers feel like they are more vulnerable in the workplace,” she says. “They just have less access to the proximity of managers in order to help them develop, help build their skill, help solve their problems and help them if they need escalation.”
The lack of visibility doesn’t end with day-to-day operations. It stretches into performance management and training.
“There's this perception that if you’ve been here for so many years, you're entitled to this kind of training. But if hourly workers don't know how to access that training—because they don't have the same leadership support—it becomes an issue,” she says.
Chhinzer doesn’t suggest a complete overhaul, but she insists that a clearer, more deliberate distinction is essential.
“You still should create a two-pronged approach for each one of your items,” she says. “Vacation: these are the rules for hourly; these are the rules for salaried. It could be even the same rules but be very clear.”
Some organizations get it right. Chhinzer points to a nonprofit she consulted with that “created two different sets of rules altogether” and aligned those with their compensation bands. She says this approach works because it acknowledges the nuances of job type and seniority rather than arbitrarily distinguishing based on how someone is paid.
“Up until you get to level D, you are considered hourly. A, B and C levels were salaried, and they had a completely different set of handbooks, regulations, rules,” she says.
Where it fails, she says, is when similar roles are paid differently without any meaningful differentiation.
“One person’s title is Program Manager, the other’s is Solutions Manager. Fundamentally, they’re doing the same job—but one is salaried and the other is hourly,” she says. “The person who's getting paid hourly looks over at the person who's salaried and says, ‘I’m taking on much more of the risks. I'm not getting the benefits.’” And from the other side: “The salaried person says, ‘Wait a minute. I'm not getting paid overtime.’”
Failure can also result in legal risks. She cites Wal-Mart Stores, Inc. v. Dukes, in which salaried workers were more likely to succeed because of better access to development and training—leading to allegations of a gendered glass ceiling, since most hourly workers were women.
“CIBC and KPMG had great overtime lawsuits that came through from salaried workers who were saying, ‘you made us work a bunch of overtime saying we were salaried,’” Chhinzer says. “Now there's a class action lawsuit, and they succeeded.”
When it comes to the most important step HR leaders could take right now, Chhinzer highlights the need for leaders to be pragmatic in their approach to hourly workers.
“Is there actually a legitimate business reason why we have decided to pay these two groups differently?” If you’re just perpetuating archaic perceptions, that is not an adequate way to lead an organization,” she says. “Split up your rules and be very process-oriented. If I'm giving ideas about training and development for Group A, I should also do that for Group B. They could be different, but they should be equal opportunities.”
This is especially important during a time when demographics are causing workplace expectations to shift. Many younger workers prefer hourly roles specifically because they define a clean line between work and life, which is a stark contrast to older generations, who typically “subscribe more to the hustle culture.”
“Some of the younger population do a much better job advocating for themselves,” she says. “They have a bit more self-loyalty than group loyalty and seem to be preferring environments in which they don't have the blurring of personal and professional space.”
Despite modest changes in workforce composition. Chhinzer notes that the gap between the two groups remains a wedge issue. What’s become clear, though, is that organizations still treat salaried roles as more desirable. And that’s where the imbalance begins.
“We’re taking the narrative that hourly workers are disadvantaged over salaried workers. But [salaried workers are] the minority,” she says.
