Creative Employee Retention Strategies to Keep Top Talent When Raises are Off the Table

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Creative Employee Retention Strategies to Keep Top Talent

No money in the budget for raises this year? Check out these creative employee retention strategies for rewarding and retaining your best employees, even when raises are out of the question.

Is Flat Growth in Salaries Impacting Employee Retention?

Last year’s raises came in under 3 percent on average, remaining flat despite economic recovery and well-short of pre-recession levels. Here are some creative employee reward and compensation perks you can use if you find yourself in the frustrating position of wanting to reward employees but unable to give much in the way of raises.

Last Year’s Flat Growth in Salaries May be Part of a Long Term – or Even Permanent – Trend that Affects Employee Retention

Research conducted by Towers Watson (a consulting firm) indicates that permanent declines in salary increases seem to follow each recession. Statistics from the last three economic recessions seem to bear this out:

  • 1990-1994: Budgets for employee raises decreased 25% (from 5.5 to 4%)
  • 2000-2002: Budgets for employee raises decreased 14% (from 4.4 to 3.8%)
  • 2009-2011: Budgets for employee raises decreased 21%, (from 3.7 to 2.9%)

In 2014, a recent Mercer study of nearly 1,500 mid and large US employers show that compared to 2011, budgets for employee raises remain flat; in fact, they are projected to be just 2.9% — the same as in 2011.

Creative Employee Retention Strategies to Keep Top TalentImage: Payscale.com Payscale Index, Trends in Compensation

Though certainly better than nothing, a 3% salary increase may not be enough to ensure that high performing employees remain engaged and motivated. It might even leave the door open for competitors or other opportunities to lure your best employees elsewhere. Here are some creative employee retention ideas for rewarding employees whether your budget includes money for salary increases or not.

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We can’t afford big wages, so we make it a fun place to work.” — Terry Knudson, co-owner of the Ski & Bike Shop, as quoted by the Grand Forks Herald

Employee Retention: 4 Creative Ways to Reward Top Talent When Raises Aren’t An Option

Extra paid time off

Having paid flex time that can be used for personal pampering, attending school events, chauffeuring kids to after school sports, music and other activities, long lunches with friends or family or a walk in the park could be a valuable employee retention perk for any number of your employees and won’t affect your payroll budget.

Strategic partner-provided perks

If you have the ability to trade goods or services with other local business owners you may be able to barter for items that can then be used to recognize, reward and thank employees for their loyalty or a job well done. Some items that you may be able to provide for your employees might include gift cards, free or reduced-price memberships, free add-ons, event tickets and so forth.

Giving away gift cards for local entertainment, dining and recreation or even for shopping at nearby local stores is not only a great way to thank your staff, but it’s a great way to build goodwill among local business owners as well.

Employee refreshment events

Refreshments are more than just snacks and beverages, though providing food for your employees from time to time or on a regular basis is a good start. In addition, you might reward employees with massages, manicures, pedicures, gym or YMCA memberships or reimbursements and similar perks. Some employers even invite yoga instructors and mobile massage therapists to come in and provide mini massages right in the work place.

Education and training

Investing in education and training for your employees is likely to increase engagement and positively affect employee productivity even when the learning and skills gained aren’t directly related to an employee’s current job. An education reimbursement program could be a very attractive benefit to your employees, especially if your organization can also provide pathways for advancement.

Taking this idea even further, you could even offer employees the chance to learn hobbies they have always wanted to learn, but have never had a chance to pursue, by inviting or hiring local experts to come in and provide workshops for employees in areas such as:

  • Learning to play a musical instrument or taking voice or acting lessons (maybe even with a view to participating in local choral and drama troupes)
  • Sports such as golf, tennis, bowling, surfing, archery – and many more!
  • Hobbies such as miniatures, jewelry-making, pottery or glass blowing

Ultimately, thinking creatively when it comes to employee rewards and compensation can help you attract, hire and retain high performing employees – not just provide a way to supplement payroll budget constraints.

Unusual employee perks and rewards can – and should – be part of the brand of your organization. As you continue to define and design the organizational culture of your business, think about how you can add creative employee rewards that reflect your business brand. It will help to strengthen the brand of your business in the minds of your employees, foster engagement and loyalty and can even become a competitive advantage in hiring and retaining the best employees.

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  1. […] numbers – especially employee engagement and personal satisfaction – also contribute to higher employee retention. Especially for employees who may have previously worked in less-satisfying […]

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