A “perfect storm” of rising costs and inflexible schedules is leading to big problems for hourly workers—and trouble for bosses. 

Basic needs like healthcare are a financial strain to this cohort, and only 60% believe they’re being compensated fairly, compared to 78% of salaried workers, according to a recent report from HR and financial consulting firm Mercer. Similarly, only 67% of hourly workers are satisfied with their flexible work options, compared to 81% of their salaried counterparts. 

Notably, workplace dissatisfaction within this group is on the rise. Motivation among hourly workers has dropped 5% since 2023. Satisfaction with flexible and remote work options is down 5%, benefit satisfaction is down 5%, the ability to maintain a work life balance is down 4%, and workers who would recommend their company to others is down 6%. 

That low morale seems to be taking a toll on both workplace camaraderie and attrition. The number of hourly workers leaving their roles because of stressful relationships with their managers and coworkers has increased 27% since 2022.

There’s an obvious answer to these issues: Pay hourly workers more. But when that isn’t possible, Mercer experts suggest HR leaders introduce flexible work options whenever possible, increase pay transparency and financial wellness programs, improve benefits communication, use feedback tools to understand what workers are going through, and create upskilling opportunities so that these employees have the chance to move up within the organization.  

“Employees who feel that they can meet their career goals are twice as committed than those that don’t, and with commitments comes engagement, motivation, and higher levels of productivity,” said Andre Rooks, partner and career business leader at Mercer, during a webinar about the study. “While the importance of this career growth is well known to employers, many hourly workers struggle with finding the opportunity to develop their skills.”

Brit Morse
brit.morse@fortune.com

Around the Table

A round-up of the most important HR headlines.

OpenAI is releasing an AI bot that can act as a research analyst by doing online research and creating reports. Bloomberg

President Donald Trump’s crackdown on federal employees going back to the office is leading to a wider rethink of flexible working policies across the public and private sectors. Washington Post

While many executives at large companies are playing down the likelihood that bots will replace workers, the CEO of payments platform Klarna is going all-in on AI. New York Times

Watercooler

Everything you need to know from Fortune.

The anti-DEI players. There are the key individuals and groups that have worked for years to undo diversity, equity, and inclusion practices. —Lila MacLellan 

The “lazy” generation. Gen Zers are tired of being blamed for their lack of work ethic, telling Baby Boomers that they’re over “working for nothing.” —Orianna Rosa Royle

A long wait. Three of the biggest job search sites, LinkedIn, Indeed, and Greenhouse, have put tools in place to highlight which companies frequently respond to applicants in a timely manner. —Jo Constantz and Bloomberg