Kevin’s doing great, and you absolutely don’t want to lose him. In a perfect world, your business would be flush with cash, and you’d be able to give generous raises to each of your employees every year, or even more often, if the situation warranted. But the world isn’t perfect. And while, from a long range perspective, yes, you need to increase revenue so you do have more cash flow room – but right now, that’s not the case. And you can’t even imagine the unhappy state you would be in if Kevin left. Oh, you would survive, but there would be a pain.
Well, here’s the good news. We, as business owners, always think the only reward that’s meaningful is more money. But survey after survey confirms that there are other things more important than money to your employees. A 2019 survey by ServiceNow showed that more meaningful work was more important to employees than a raise. And beyond that – in a recent Businessolver survey, 60% of workers said they would be willing to take a pay reduction – that’s right – a REDUCTION – to work for an empathetic company. And not for nothing – but the Harvard Business Review found that the 10 most empathetic companies increased in value more than twice as much as companies at the bottom of the reporting.
So yes, how you show up as a leader is really important to your employees, and is considered a reward. But beyond that – you’re probably thinking, if Kevin asks me for a raise, and I say I’m going to become more empathetic, he will just laugh and point as he walks out the door.
Well, OK – so you want rewards that are a bit more tangible. I get it – try something from these top 5 categories.
Start, or increase, your benefits offerings. Maybe you already offer medical coverage, how about upping the company contribution (I know – but it’s still less than trying to replace Kevin). Or think about adding other less traditional offerings – like a college fund savings plan, or pet insurance. If you don’t already have one, how about a retirement plan. Or you could set up a profit sharing plan – you get the tax break, and it allows your employees to share in the company’s profits, at a level that’s doable for your budget.
Don’t overlook time off. That’s an immediate, high impact, visible reward. Add extra days off for a job well done, or give work from home days either as a spot reward, or create an ongoing schedule in lieu of a money bonus. How about something like summer Fridays, or an additional day off before or after a holiday.
“60% of workers said they would be willing to take a pay reduction…to work for an empathetic company”
You could also take a look at offering learning opportunities. Pay for a class or seminar. Better yet, it doesn’t have to be something work related. Pay for a cooking class, or pottery lessons, or tap dancing, or painting lessons. And yes, I know – yikes – this might actually require you to get to know something personal about your employee. Well let me tell you – that’s a good thing. So jump right in – don’t be shy. In fact, one of the best ways to get at what they would like is to – wait for it – ask them! Shocking, I know. But believe me, they’ll be happy to tell you – and they’ll have oodles of fun thinking about what they would like.
In the realm of non money perks, try public recognition and acknowledgement. A public ‘job well done’ can go farther than you would every think it could. And there are ways to make this type of recognition fresh and much less cheesy than an employee of the month picture, crookedly hanging on the wall. In fact, employee recognition has come a long way – actually, all the way to the web. Software applications like Nectarhr give you a platform that allows managers, and colleagues to give redeemable reward points to fellow employees. (Disclaimer – no I’m not an affiliate, and in fact there are other players in this area, like Bonusly and Blueboard). But here is the link to Nectar if you want to check it out – they also have a free tier.
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And don’t rule out really going old school – how about a handwritten thank you note? Yep, that works too.
Of course, we can’t overlook other rewards that invest an employee in the company – things like stock options, phantom stock, and other value sharing arrangements – but beware, these type of arrangements should be reserved for key contributors only. You’re dabbling with ownership here, so dole these out very carefully, and not without carefully consulting your attorney and accountant first.
So, when you’re next faced with the issue of “I can’t give Kevin a raise” – think about some of these solutions. In fact, think about them before you need them – because actually putting something like an employee recognition program in place right now will improve your culture and employee engagement.