Giving your employees a raise isn’t just recognition for their achievements and contributions; it shows you trust that they’ll keep doing their part in advancing your business interests. After all, people will always be your greatest resource, and they’re waiting for you to recognize their work.
But a bump in pay isn’t always in the budget, and you’re now left with a difficult decision: how to show your appreciation when a salary increase is out of the question.
Beyond anything, transparency is most important. Be honest with staff. Tell them what’s happening with business. They’ll appreciate your honesty and be much more understanding of the situation — just as long as you give them an idea of when things will change and when money will be available for salary increases again.
In the meantime, consider offering them another perk to fill the gap. The following are some ideas of what you could provide employees in lieu of a raise:
1. One-time bonus.
Money, as they say, talks. If a raise isn’t in the budget, a one-time bonus could be enough of an incentive to maintain employee morale, satisfaction, and engagement until you can offer an actual salary bump.
2. Flexible schedule.
A perk employees value most is flexibility — even more so than pay. In fact, 88 percent of people would more heavily consider a job if the employer offered flexible hours. In lieu of a raise, consider giving staff more flexibility in their schedules.
3. Work from home
As far as perks go, second to flexibility is often telecommuting, with 80 percent of people saying they’d consider a job if the employer offered the option to work from home. Give employees the opportunity to telecommute one or two days a week — it’ll save on their transportation costs, which is basically money in their pockets.
4. Time off.
If you can’t offer a raise, extending the time-off policies by a few days is another viable option. Staff obviously benefits from the additional leisure time, while your business gains one particular advantage: Employees return to work even more reenergized, which can result in engagement and productivity gains.
5. Stock options.
It isn’t uncommon for companies to use employee stock option plans to compensate staff. Give employees the option to buy a set number of the company’s shares at a fixed price within a certain period of time.
6. Mentorship program.
Sixty-three percent of Millennials feel their leadership skills aren’t being developed — at least according to a recent Deloitte Millennial Survey. They’re also 68 percent more likely to stay at an organization for more than five years when working with a mentor. Consider adding this perk in place of a bump in pay.
7. Tuition reimbursement.
Establishing a tuition reimbursement program has a monetary value for many employees, and it also demonstrates that — even though you can’t offer a raise — you’re invested in their professional development and future.
8. Transportation reimbursement.
Gas, tolls, fares, and parking fees all add up. Offer to give a set amount of money back each month for employee transportation expenses. If that’s not feasible, look into providing some sort of discount for parking or using mass transit.
9. Personal perk.
Smaller organizations may want to sit down one-on-one with employees to explain the situation and come up with an individualized solution to no annual raise. One person may want additional time off, while another may take a membership to a gym or professional organization.
If you’d like more advice or insights for improving your business or building a stronger workforce, please feel free to contact the team at Advantage Resourcing today. We’d be more than happy to discuss your needs and help you determine the resources necessary to make a real difference for your company’s future.