With healthcare and other costs rising, many small business owners face uncomfortable money conversations with employees. If you’ve trimmed all the fat from your expenses and still can’t afford annual raises, it’s time to get creative. Extend one or more additional benefits that will help retain valuable employees and possibly boost loyalty and employee satisfaction.
“Most employees consider compensation one of the most important benefits,” says Charles Tidball, a human resources manager for a Nashville-based advertising and design firm. “But many value generous time off, flex time, and other benefits as high or higher than compensation.”
If raises aren’t in the budget this year, consider these alternatives:
1. Paid Time Off (PTO) programs
Rather than allot a specific number of days for sick, vacation, and personal time, a PTO program offers a “bucket” of paid days off that employees can use as needed. PTO programs help reduce unscheduled absences and administrative costs. They also boost employee satisfaction by giving workers the freedom to make their own time-off decisions.
Small business owners shouldn’t worry about losing control of their employees by allowing them to work from home. A 2012 Stanford University experiment showed that working from home led to a 13 percent performance increase, due in part to fewer breaks and a quieter working environment. “Employees want work life balance,” says Tidball. “Telecommuting offers tangible cost savings for employers and employees.” Employers save on energy costs and office space, while employees save gas and precious commute time.
Like telecommuting, offering flex time shows you trust and respect your employees. Personal demands don’t always fit around a traditional nine-to-five schedule. Offering flex time to accommodate alternative schedules can create greater job satisfaction and enhanced productivity. “The important thing is that the employee gets their work done,” says Tidball. “With flex time, they don’t have to stress about getting to work late. The ability to schedule their time is very valuable.”
You have great employees. Help them succeed and grow by offering ongoing development. Training and development programs keep employees engaged and productive. “Employees consider development a top reason to either leave a company or stay invested in career growth,” says Tidball. “It will cost money, but not as much as hiring and training a new employee. Focus your money on the most valuable people you’ve got.”
5. On-site childcare
Finding, paying for, and shuttling children to and from day care are some of the most challenging scheduling hurdles that working parents face. On-site day care lessens these burdens and allows parents to spend more time with their children. It also boosts employee morale and lowers absenteeism, which saves the company money. An on-site day care may not be feasible for many small businesses, but the company could consider partnering with a neighboring business to form a day care cooperative or negotiating a discounted rate with a nearby day care facililty. “It’s a little costly,” says Tidball. “But it might be cheaper than across-the-board raises and the returns could be worth it.”
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