How to reward employees without breaking the bank

As a small business owner, controlling your finances and cash flow is vital for your success, as are a team of competent and loyal employees. But, without the budget to offer big financial incentives, how can you ensure that your employees will stay?

Andrew McLeish is the managing director of Stopline Pty Ltd. He employs a team of eight and understands the struggles of running a small business.

“Employee retention is a challenge, but over time I’ve learnt that good employees are well worth keeping because they’re difficult to replace,” he says.

“We can’t compete with big organisations [when it comes to] financial incentives, so I incorporate [the] incentives we can afford,” says McLeish. He says these include options such as additional annual leave, charity days and family days with the employee’s children.”

“We try and have a lunch at least once a month, or after a big week, and I always provide my team an alternative to working long hours and being stuck in an office. Some of them work remotely and mostly from home.”

But while recognising the importance of employee engagement and retention is one thing, implementing incentives is another, especially for small businesses with limited cash flow. However, there are ways other than financial, to attract good candidates to your small businesses.

Additional annual leave

“Giving everyone five weeks annual leave a year is just a matter of background admin,” says HR consultant, Jacqui Elliott from Astute Recruitment. “You don’t have to be disadvantaged by the additional leave. Just allow employees to take that extra week in quiet business periods.” Additional leave entitlements can be incremental, based on tenure or performance. Alternatively, an additional day’s leave on birthdays or rostered days off (RDO’s) works well.

“A long weekend each month has a positive effect on work-life balance and employee engagement,” says Elliott. “Time is such an extremely valuable commodity; you should never undervalue this as a gift.”

Workplace training

Training is a great incentive to keep your team members engaged, and it doesn’t have to cost the earth. Tapping into your existing employees’ skills and weaknesses is a beneficial way of seeing what they can learn from and teach each other.

“Any investment in professional development is gold,” says Elliott. “If you can, budget in an annual opportunity for your team to attend a conference or day training session that will advance them. This shows you care, and you in turn get the value of the added skills.”

Alternatively, you can encourage your team to access free webinars online or contact local training providers to see if they make any concessions for smaller businesses.

Give back with charity days

“Juggling work, a family and social life, means people have limited time to devote to causes they’re passionate about,” says Elliott. “But giving back to the community is good for the soul, and offering people the opportunity to take a paid day off to be able to do this is a good incentive.”

Giving back to the community communicates your values to your team – but also to your clients and customers.

Elliot says promoting that you are a business with a ‘corporate conscience’ is something potential clients and future employees will consider when taking on a role, or staying within the business

Promote flexible working

Flexible working arrangements are another good incentive to achieve employee engagement and retention, particularly for your employees who are also parents.

“Flexible working arrangements aren’t necessarily about diminishing hours, but about offering alternative options that work for people,” says Elliott. “Flexible working arrangements could incorporate early starts, late days or work from home options, that allow your employees to manage childcare, school pickups or unexpected sick days

Regular coffee catch ups

“The biggest complaint in small businesses that can lead to losing employees is lack of communication,” says Elliott. “As business owners, we get busy, focused and forget that people need to give and get feedback and feel acknowledged.

“If you can give your time to each of your employees once a month or bi-monthly so they can talk through ideas, concerns and just get a bit of your attention, they’ll feel appreciated and engaged.”

Acknowledgement of commitment

Acknowledging your team with a letter and personalized gift on their work anniversary is a nice touch that can easily be achieved in a small business, says Elliot.
“Similarly, an employee of the month award is a good way to acknowledge an employee’s hard work. It can also provide a bit of friendly competition in the workplace which can fuel employee engagement and motivation.”

She says these ideas prove that engagement and retention incentives don’t have to break the bank. It’s about being creative, in tune with your team and observing what does and doesn’t work.
“In small business, what we have that the big guys don’t is agility,” says Elliott. “We can change the rules, move with the market and be responsive. We don’t have rigid guidelines around progression, investment and time. So, use this to your advantage and make all of these assets work for you.”

Other ideas worth considering include:

Fruit baskets and healthy snacks in the tea room make your team feel looked after during busy times when employees may be working extra hours.
• A card or small gift for their partners at Christmas or other important times of the year shows you appreciate their support behind the scenes, and communicates your values as a business that supports their family.
• A monthly lunch or after work drinks is a good way to get to know your team better and open up communication.
• Providing tax deductible items such as phones and laptops can relieve the pressure on employees when incorporated into their salary package.
• An innovation bonus could be offered to employees who contribute and implement a business idea. This shows that you value your team’s input and encourage them to think outside the box.