Good experiences lead to worker loyalty

Key takeaways

  • Workers are more likely to return to work at the same business after both they and the business leave positive reviews
  • Higher pay is not always linked to a higher likelihood of a given returning, though it does makes shifts more attractive to all workers
  • Other non-monetary factors, like commuting time, may also influence workers' likelihood of returning

The nature of flexible work means that businesses may bring in a series of different people for the same job on different days. But for roles that require a little training or collaboration, having the same people return to the workplace can be a big advantage. So how can businesses cultivate loyalty in their flexible workforce?

We decided to try a simple exploration of the subject. First, we looked at the share of Instawork Pros who signed up in 2022 and then returned to work at any location of the same company. Then, we checked how many returned to work at the same business location of that company:

 

Share of Pros who returned to any business location of the same company: 41%
Share of Pros who returned to the same business location: 37%

Next, we wanted to see whether good experiences made workers more likely to return. On our platform, our Pros and our business partners can both rate their experiences after every completed shift. When Pros had good experiences, their chances of returning to the same location increased slightly, from 37% to 38%. When businesses also had good experiences, the likelihood rose again:

 

Share of Pros who returned to the same business location after leaving a positive review: 38%
Share of Pros who returned to the same business location after leaving a positive review and receiving a positive review: 39% 

This makes sense intuitively – the better the match in our labor market, as measured by mutual satisfaction, the more likely a Pro would be to return. But clearly, these differences are small, though statistically significant.

A surprising dynamic for pay and loyalty

Putting aside the quality of the experience for workers and businesses, we thought that pay might also influence loyalty. Would Pros who received a higher rate than the average for a given role in their area be more likely to return? As it turned out, the answer was no. In fact, Pros who received lower rates than average were more likely to be loyal:

 

Share of Pros who returned to any business location after receiving hourly pay 20% or more above average: 24%
Share of Pros who returned to the same business location after receiving hourly pay 20% or more below average: 37%

This feels like a surprising result – why would Pros return to low-paying shifts? Perhaps the shifts offered non-monetary benefits that were among the reasons for Pros choosing them in the first place. Some of those benefits might be hard to measure, but one of them isn't: commuting distance. Here's how the distances compared for the high-paying and low-paying shifts:

 

Average one-way commuting distance for Pros who received hourly pay 20% or more above average: 20 miles
Average one-way commuting distance for Pros who received hourly pay 20% or more below average: 15 miles 

So Pros had to travel five miles further, on average, for the high-paying shifts. That's one possible reason why the low-paying businesses were more likely to see Pros come back.

Importantly, this doesn't mean that raising pay will decrease loyalty. We haven't identified a causal relationship here. All other things equal, we would still expect an increase in pay to make a shift more attractive.

But higher pay makes a shift attractive to all workers, and so it would be harder for a returning worker to grab the shift before someone else did. (This is why our business partners can create rosters of preferred workers, to whom they can advertise shifts exclusively.) The reverse would be true for low-paying shifts, which would not attract as much interest, making it easier for a given worker to return.

In fact, the same dynamic could take hold with feedback. In addition to rating shifts, Pros can leave reviews and advice about shifts they've worked. When a Pro leaves a positive review for a business, it could attract more interest from other Pros – and could actually make it harder for the Pro to return to the business, unless he or she got onto the business's roster. It's a bit like that hidden gem of a restaurant that you found on the other side of town... do you tell anyone about it, or keep it for yourself?

Disentangling all of these factors will require further research. For now, we can say one thing for sure: creating a positive atmosphere in the workplace will probably pay off in the long term, with more workers returning to become integral parts of the team.

 

Realtime metrics

These metrics, derived from data aggregated across the Instawork platform, compare the two weeks starting 8/25/2022 to the previous two weeks. To control for the overall growth of the Instawork marketplace, only shifts involving businesses that booked shifts in both periods are included:

  • $0.24 rise in hourly pay

  • 0.8% point drop in share of short-notice shifts

  • 0.9 hours drop in hours per existing worker

To receive future briefings and data insights from our Economic Research team, please subscribe below. Follow Daniel Altman on Twitter at @AltmanEcon or on LinkedIn.

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