Convincing Young Employees that Hourly Is as Good as Salaried

Focus on career development to keep emerging adults engaged

By Arlene Hirsch Jul 19, 2016
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Before she discovered a passion for HR, Jennifer Colclazier worked for eight years in various administrative roles with a small Midwestern company. In those jobs, she had many HR-based responsibilities, including interviewing and coordinating performance reviews. So when she decided a career in HR was for her, she enrolled in an online degree program and earned a bachelor's degree in human resources, which led to her current salaried position as an HR assistant for Enertech Global, a geothermal manufacturing company with locations in South Dakota. 

As the sole HR professional for the company's 51-employee facility in Mitchell, S.D., Colclazier manages recruitment and hiring, facilitates onboarding, administers employee benefits, ensures compliance with Occupational Safety and Health Act regulations, and oversees employee relations. She said that she works long hours and earns a fair salary for her location. But under the new overtime regulations, set to become law on Dec. 1, Colclazier expects to be reclassified as an hourly employee.

While Colclazier, 34, doesn't view her pending change from exempt to nonexempt as a demotion, she's not sure how she can meet all of her responsibilities within an eight-hour workday.

"It's much more than a 40-hour job," Colclazier said. "A lot of the administrative work happens after 4:30 when everyone goes home and I have some quiet time to concentrate."

Colclazier prides herself on being available to meet her employees' needs as they arise, and she said she'll struggle with how to make herself less available without hurting their feelings or making them feel like their needs are being neglected.

Enertech Global is among the hundreds of thousands of organizations nationally trying to determine how to comply with the new overtime rule. More than 4.2 million white-collar workers in the U.S. will become eligible for overtime under the new Fair Labor Standards Act (FLSA) criteria, according to the U.S. Labor Department. 

The revamped regulations likely will impact young employees the most, since many of these relative newcomers to the workplace fall below the new $47,476 threshold for salaried employees. Many who are currently salaried professionals may be reclassified as hourly employees rather than receive pay hikes to reach the new minimum.  

For young employees, especially those who are working in their first salaried position, figuring out how to live and work within the new parameters will be a challenge. For some like Colclazier, the issue will be learning how to do their jobs without working more than 40 hours weekly. For others, it will be dealing with the perception that they've lost flexibility and are now hourly workers, which many perceive to be less prestigious. 

"Less workplace autonomy and flexibility may cause quite a backlash with our youngest workers, as this new approach runs counter to so much of what they strive for at work," said Michelle Smith, marketing vice president for OC Tanner, an employee rewards and recognition company in Salt Lake City, Utah.

"It will take time for everyone to adjust to new ways of thinking and working," said Chicago psychologist Laurie Anderson. "Change is difficult." 

Anderson believes that the new overtime rule will force organizations to rethink how newly reclassified employees can accomplish their goals within a restricted time frame—and re-engineer the way that people get their work done. "There are a lot of wasted hours during the day that can be converted into productive activity," she said.

The impact of the new ruling, and the potential ramifications for how ambitious emerging adults deal with the implications, will reverberate throughout organizations for many years to come, say industry analysts, who add that it's important for HR to manage the process by regularly meeting on an individual basis with these younger employees, soliciting their feedback and helping to resolve their problems.

"Providing a strong, clear vision and as many options as possible for making the new law work for young workers will be HR's most important role in preventing a rash of disgruntled workers from exiting corporate life for something more entrepreneurial," Smith said.

It's not just about complying with the rules, added Anderson. How those rules are explained and implemented may determine whether younger employees are motivated to succeed or become increasingly disengaged. For instance, the new rules could push them to develop skills and experiences that enable them to grow their salaries along with their experience. A shared investment in career development between HR and younger employees can ignite motivation and give meaning and purpose to the change, she says. 

"HR can help them realize that this is a stepping stone on their path," Anderson said.  

Otherwise, engagement may become even more of a challenge and job hopping may be encouraged as younger employees migrate to the highest bidder, especially if the highest bidder lets them cross the threshold from nonexempt to exempt.

One approach is for employers to double down on their commitment to employees who are reclassified from salaried to hourly, said Paula Kosin, president of the Kosin Group, an HR consulting firm in Chicago. 

"I feel strongly that employers really need to boost their commitment to offering professional and career development opportunities with the change from exempt to nonexempt," said Kosin. "Through their actions they can demonstrate their commitment to these employees' development."

Among the possible actions she suggested:

  • Schedule regular career discussions with affected employees.
  • Develop mentoring programs so these employees don't feel alone.
  • Offer career development workshops or webinars.
  • Provide chances to participate in cross-functional teams.
  • Encourage volunteer activities as a group or on an individual basis.

Anderson said business leaders need to explain the context for the rule to younger employees. "They need to understand that the rule exists to protect them," she said. "While it may feel personal, it's not a reflection of their abilities. They need to know that they are still valued members of the organization and that their employer is committed to them."

Sharlyn Lauby, creator of the blog HR Bartender and president of ITM Group Inc., a Miami/Fort Lauderdale, Fla.-based HR consulting firm, urged employers to make sure that younger employees understand that they aren't being singled out because of their performance—that it's not personal, it's the law.

"They need to know that it's not about how they get paid. It's about the experiences that they accumulate," said Lauby. "Tell them: 'Your experiences define your career.' "

The experts agree that younger employees also need to feel like they are part of the conversation—that they have a say in what is happening to them.

"HR and other leaders must find a way to communicate 'with' rather than 'at' young adults," Smith said. "Provide ample opportunity for young workers to express their concerns about this change."

Anderson agreed. "When newer employees aren't part of the decision, it feels like something is happening to them and they focus on the negative," she said. "You have to make them part of the conversation so that they understand that this isn't personal. They are part of an evolving workplace."

Encourage young employees who work in HR to develop their own expertise in the FLSA. Colclazier said her experience as a board member of the South Dakota SHRM State Council has helped because the council has been actively involved in helping its members understand and comply with the new ruling.

Arlene S. Hirsch is a noted career counselor and author with a private practice in Chicago, where she specializes in working with emerging adults and their families. Her books include How to Be Happy at Work (Jist Publishing, 2003), Love Your Work and Success Will Follow (Wiley, 1995), and The Wall Street Journal Premier Guide to Interviewing (Wiley, 1999). Her website is www.arlenehirsch.com.

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