How do you keep great employees happy when you cannot pay them more?
I was asked one time, by a small business owner who had 6 employees, how to address a request by a valued employee for more compensation.
He said that he wanted to pay her more because she was a valued and hard working employee, but she was already at the top end of the pay scale for the position and he was very comfortable that he was paying in the top range for the position in the industry.
He was torn because he did not know if he should or could raise her wage but he did not want to let her work go unacknowledged.
He told me further that the position was a fairly junior role and the employee had taken it right out of college. He wondered if he should create a new job title and then promote her into it.
From the employees point of view
From the employees point of view having a boss who is willing to create a new role for you and pay you more to keep you is a great experience. However, it is may not always be feasible to create a new job to meet the career growth needs of an employee in a small business.
I asked this employer if he still needed the role the employee was currently in and if he moved her to a new role would he and could he still need to fill the role she left. He said yes, the role she was in was necessary and he did not think he could afford to add a new role and keep the existing role
It is always a good thought to try to keep a good employee. Sometimes however an employee may outgrow a role and you have to recognize if you are in a financial position to keep that employee around by paying them more or if you have other options.
Sometimes you cannot afford to pay more money but you still want to demonstrate to that employee you value them.
Over the past 6 years many employees have felt the pinch of tightened employer wallets. Today even if the economy is picking up steam in some sectors that does not mean that small businesses can afford to provide more money to keep their best employees happy or engaged.
In many cases employee wages have not increased for some time but at the same time small businesses have put off spending on equipment, technology and other elements of business they need to invest in to remain competitive.
As a result even if the business bottom line is starting to increase many business owners cannot afford to top up their best employees wages.
Here are a few options to consider that demonstrate to an employee you value them when you cannot afford to pay them more:
7 ‘Rewards’ To Keep Great Employee Engaged
For many employees flexibility is highly valued. Offering an employee the opportunity to work from home, work a shorter workweek or simply a workday that is not structured can provide them flexibility that makes them feel trusted and valued.
2. Additional Time off:
You have probably heard that some big time organizations offer their employees unlimited time off with the stipulation that as long as they get their work done they can take the time off they need.
Rewarding a valued employee with the ability to take time off when desired (with proper notification for more than the occasional day) can seem like an extreme reward but if they are already a valued and trusted employee then trusting them to get the work done is not a stretch.
3. A meaningful job title:
Some employees appreciate a title that reflects something to them and to others, even if more money does not follow. A title of ‘Lead’ or ‘Principal’, ‘Director’ can be a motivating reward and a boon to their career down the road.
4. The gift of learning:
Provide the opportunity to attend conferences, classes or seminars and task them with bring back and share what they learn. This can enable them to have an impact in how the organization is shaped in the future.
5. Mentoring opportunities:
Create a mentoring program in the organization and give this employee a role as a mentor or connect them with a mentor to help them further develop their career. These different challenges, the opportunity to learn from or lead others can be rewarding and engaging.
6. Ownerships/Partnership opportunities:
Although not always an option or an interest there are many instances where a valued employee can became a partner or be provided with ownerships options. This could be presented as a long-term opportunity.
7. A great working atmosphere:
This sounds like a no brainer but it takes work to create a good workplace. Offering small things that don’t cost much, listening to employees, asking for their input, celebrating successes with them, acknowledgements and gratitude for contributions can all create a place where employees want to stay and work hard.
Tell your employees that you value then and show it publically and you may end up like Arthur T. Demoulas, the Market Basket Grocery store CEO who in 2014 was fired by his cousin and eventually who got the company and is job back when employees and even customers rallied behind him and boycotted the stores demanding his reinstatement.
Sometimes when an employee has reached that ceiling and there is no more money you will not be able to keep that employee.
In the scenario I began with the small business owner sat down and explained to the employee why he recognized her abilities but was not able to give her a raise in her current role because for that role he was paying a very good wage. He also explain that he knew she had outgrown her current role and he would understand if she felt she needed to advance her career by going elsewhere.
However, I had asked him to think down the road and consider when he felt he might be in a position to create the new role his employee was suited. When he spoke to her he explained that if business proceeded as he hoped the role she was seeking would be created in about a years time.
In this case the employee decided that she was willing to wait for the possibility because, as she told him, she valued the fact that he valued her enough to think about her career future.
Money is important to be sure, but if you are paying a fair wage showing your employees you value them can compensate for a little less compensation most of it.