5 Key Takeaways from CHROs on Driving Frontline Worker Ownership

6/2/2024

Jason Lee, founder and CEO of Salt Labs, recently facilitated a panel discussion with Evanta governing body members Julie Sexton, CHRO at Land O'Lakes, and Margeaux King, VP and CHRO at Toro. Fifteen CHROs across different industries shared their expertise in innovative human capital strategies and leadership development initiatives.

The group mainly focused on strategies to foster a sense of ownership among frontline and hourly workers. They explored various approaches and challenges companies need to consider to achieve this goal. Universally, there was optimism that driving ownership outcomes, while challenging for a typically transient workforce with high turnover, is possible with some creative thinking and inventive strategies.

1. Executives agree on standard definitions of frontline employee ownership

As it relates to frontline workers, HR executives define the term “ownership” to mean:

Pride
Agency
Empowerment
Engagement
Autonomy
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‍2. Some initiatives to improve employee connection, in the best cases were well received, but didn't provide outcomes of employee ownership

HR executives have tried several strategies to help frontline workers feel like owners. While these initiatives might help frontline workers feel good temporarily, there was a feeling that there was little lasting effect on employee ownership and the bottom line.

These initiatives include:

Taking Executive Roadshows to company locations across the country to get key leaders in front of frontline workers to offer their appreciation. While these may be good for a boost in morale, they don’t provide employees with anything of lasting value.
Recognizing employees with spot bonuses that can be subjective based on managers having to hand them out. These lack predictability and can be perceived as unfair because the manager has to see the worker doing something that merits a spot bonus and may play “favorites.”
Offering flexibility and benefits (e.g., consistent shift scheduling, daycare services for worker’s children). Again, these might be great options for subsets of the population, but they are initiatives that don’t largely impact how employees connect to their work.

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3. Stock plans and 401(k)s are not as effective at driving frontline employee ownership in the same way it is for Salaried employees

Many companies have 401(k) plans; some even come with employer matches. Others offer Employee Stock Purchase Plans that allow employees to become actual company owners as stockholders.

These plans work well with salaried employees, however, because they require a deduction from an employee’s pay, they don’t work well for frontline employees who don't have resources left over from their pay after allotting the lion’s share to household expenses, and therefore are not highly adopted.

In the rare instances that an hourly employee chooses to participate, there is often a lot of friction in the process. Frontline employees commonly need help with issues ranging from new account openings to a lack of financial literacy (i.e., not understanding how these financial tools work), and sometimes even language barriers. In worse cases, the benefits are not utilized correctly, such as making early 401k withdrawals that are heavily taxed and expensive.

For these reasons, traditional stock equity and 401(k) plans simply don’t work for this demographic or require a lot of resources to get off the ground and maintain.

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4. Linking frontline workers roles to business outcomes is crucial

These workers often need help to see the impact of their work on overall business operations; otherwise, they have no loyalty to their employers. They also want a stake in the future of their work, something to show for their hard work and dedication to their jobs. Something that has been sorely lacking up to this point.

If employees don’t see the overall value of their work and its contribution to business outcomes, how can we expect them to act like owners? The same is true when we don’t give them something they can own and control.

A behavioral economics phenomenon called the Endowment Effect states that people place a higher value on something they own—they value it more than if they don’t own it. If you own something because you work to get it, there’s a lot of value in that for the frontline worker. So, it would appear that a new source of ownership for frontline workers is something they need.

5. Innovative rewards & incentive platforms using behavioral science principles help drive ownership & loyalty

The idea of owning an asset they receive in addition to their paycheck resonates with most hourly employees.

Jason Lee, who introduced on-demand pay to employees through his first company, DailyPay, has developed an innovative solution specifically to help frontline employees act like owners through his new company, Salt Labs. This rewards and incentives platform gives frontline workers the ownership they desire, resulting in higher loyalty to their employers.

Employees earn one Salt for every hour they work. Each day their work, they continue to accrue Salt points. They set goals for their Salt, and when they reach those goals, they can exchange their Salt for a reward, such as a financial product or a fun trip.

Salt gives frontline workers something to save outside their paycheck that helps them act like owners. It doesn’t require management oversight and increases retention by 56%. It’s a self-initiated and self-administered store of value that hourly employees build for themselves simply by working.

We’re helping hundreds of thousands of frontline workers finally have skin in the game with a platform that allows them to earn rewards and incentives simply by working.

Interested in learning more? Email us at partnerships@saltlabs.com

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