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Creative Ways to Compensate Employees
As much as we’re hearing about inflation and the cost-of-living increases, we’re also hearing from experts that a recession is looming. Now more than ever, employers are looking for creative ways to attract and retain great employees without implementing unsustainable pay increases, or possible layoffs, because wages are too high when business slows.
Here are a few creative ideas for you to consider in lieu of pay increases:
- Pay for attendance: So many of us are spending all our efforts on finding people instead of keeping our current staff and motivating them to be there every day to meet customer orders or client expectations. One way to motivate your current staff is to provide a bonus each pay period if the employee works their scheduled shift for that pay period. For example, you can pay a $100 bonus for each week an employee works their scheduled hours. This recognizes their loyalty to you, incentivizes them to come to work, and you’re maximizing the productivity of your current staff.
- Paid time off: Not everyone is looking for more money – many people, especially those under 30, value paid time off more than a higher wage. Look at your Paid Time Off plan. Is it stingy? Can you add more PTO for everyone, while giving the most to your most senior or valuable employees? Could you offer more PTO in lieu of a pay increase? For example, an employee who makes $20/hour and would normally get a 3% increase, would be losing close to $1,250 a year if they didn’t get the 3% raise. Could you offer $1,250 of time off instead, or a portion of that?
- Delayed signing bonuses: Pay 50% the bonus upon the first pay date, 25% in six months and the last 25% after 12 months. This helps with recruiting and retention!
- Performance bonuses: No one wants to ignore our top performers. Consider a performance bonus in lieu of a pay increase. This will keep future payroll costs down when needed.
Managing employee expectation for pay increases during a turbulent economic period is difficult. Listen to your employees and explore compensation ideas that will be mutually beneficial for you and your staff. And contact The Employer Group to engage with our professional payroll and HR experts if you have compensation research or planning needs.