By: Teri A. Coutu
Blue Rock Business Advisors
Every business I talk to is desperately searching for ways to attract employees. Most are spending a lot of money on recruiters and advertising, and everyone is offering either a sign-on bonus or a high pay rate to attract candidates.
While it’s important to keep up with the current pay scales in order to attract new employees, you are likely to do more harm than good if you offer new team members a better wage than current employees. Unfortunately, many businesses don’t have the revenues to warrant increasing pay scales across the entire organization just so they can fill some seats. So, they throw a lot of money at recruiting and often write off anyone who leaves as not being a “team player” or as “the wrong fit.” This mentality creates negative morale, a sad company culture, and usually results in the loss of excellent employees.
So, what can you do that’s different?
Instead of putting all your efforts into recruiting, your money will go a lot further, especially over the long haul, if you reward the people already on your payroll. Consider implementing a Stay On bonus program to reward team members who stay with the company.
While this has traditionally been used to retain C-level executives, it is now being incorporated into many company cultures to appreciate and retain dedicated employees at every level. This makes sense when you think about the high cost of employee turnover and multiply that by the lack of viable candidates in today’s job market.
To determine how best to offer a retention bonus, start by asking yourself these questions:
Are you going to offer one lump sum, or several smaller payments over time?
Will you base bonus amounts on individual salaries, length of service, or a combination?
Will you give a set percentage, or a sliding scale?
Will you use the same retention bonus program across the entire organization?
Money isn’t everything
While money is often a big incentive, believe it or not, there are people on your team who are not motivated by it. For these people, you may need an alternate retention bonus program. If you’re not one hundred percent certain what motivates each of your employees, survey them with questions such as:
What they need in order to be/stay engaged in their current job.
What would entice them to move to a new employer.
What they feel the company should do to keep employees.
Ask direct questions and be prepared to provide direct answers and/or actions to address any weak areas they identify. Your current team can provide you with a wealth of information that can help take your business to the next level, but you have to ASK for their input.
There is no guaranteed way to find and keep great employees – especially right now. But, the more you focus on appreciating each member of your current team, the more likely they are to be more engaged, be more productive, and help you build a more positive culture that will organically attract new employees.