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Rewards Without a Raise Key to Employee Retention for SMBs

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As I've written before, one of the best ways for SMBs to compete for employees is to highlight the differences that set them apart from their larger competitors.

 

For instance, a Boston-based tech company called Pegasystems has been able to compete with the likes of Google, Yahoo and Microsoft by offering employees expedited access to senior executives up to and including CEO Alan Trefler.

 

This advice is worth reiterating in tough economic times when employees are clamoring for a raise, according a Seattle Post-Intelligencer story.

 

Business owners should never dodge an employee's request for more money, says employee retention consultant Beverly Kaye, but should truthfully acknowledge that a raise just isn't possible right now. Instead, says Kaye, offer perks such as added vacation days or the option of arriving late or leaving early. It's important to ask employees what they want instead of assuming that the same benefits will appeal to all workers.

 

Rob Wilson, owner of a Chicago outsourcing company, says he took advantage of a vendor discount for multiple mobile phones by offering a company phone to employees in lieu of a raise.

 

SMBs should conduct market research to ensure they are paying salaries that are in line with market rates, cautions Wilson. Otherwise, they risk losing employees and facing lost productivity costs in addition to the expenses associated with recruitment.

 

Another good piece of advice: SMBs should be willing to trim expenses as much as possible to satisfy valued employees' requests for a raise rather than automatically dismissing the idea, notes Kaye.

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