As a small business owner, you probably don’t have endless resources at your disposal. While Fortune 500 companies may be able to offer their employees fat salaries and top-notch benefits, you’re happy to have enough cash to keep the supply closet stocked.
If you can’t afford to cough up sky-high salaries for your small business employees, you’re not alone. According to some research, the smaller the business, the smaller the salary. In fact, the average pay per employee for a very small business (20 employees or fewer) was $36,912 in 2012, according to the U.S. Census Bureau. For small firms with 20 to 99 employees, the average salary was $40,417, and at medium-sized firms it was $44,916. On the other hand, at large companies, the average pay was $52,554.
With limited capital, how can you keep your staff satisfied and productive? Believe it or not, money isn’t the only way to motivate employees. Here are five non-monetary ways to motivate your staff and boost employee retention.
(For more on employee retention, see 8 Reasons Why Valued Employees Quit.)
1. Let Them Work from Home
Many employees see the option of working from home as a major work incentive. After all, who doesn’t want to work in their pj’s and fuzzy slippers with their dog snoozing at their feet? Two-thirds of people want to work from home, and 36% say they would choose this perk over a pay raise, according to Global Workplace Analytics. Another study shows that people who work from home at least three days a week are more satisfied with their jobs because they have less stress and face fewer interruptions.
To top it off, allowing employees to work from home can actually save your business some serious dough. Small businesses that allow employees to work from home full-time save an average of $10,000 per employee each year in real estate expenses alone. Studies also show that employees who work from home are more productive and less likely to call in sick. This all leads to major cost savings for the employer – not to mention a higher employee retention rate. (For examples of jobs that can be done from home, see Top 10 Jobs That Allow You to Work From Home.)
2. A Good Old-fashioned Pat on the Back
One of the easiest and cheapest ways to motivate employees is also one of the most often overlooked: recognition. Of course everyone wants to feel appreciated, especially when they go the extra mile at work. Whether you make a point to thank an employee face-to-face for a job well done or offer her a day-off reward for totally crushing that big sales presentation, a little bit of positive reinforcement can go a long way. In fact, organizations with effective employee recognition programs had 31% lower voluntary turnover than organizations with lackluster recognition programs, according to a Bersin & Associates study.
3. Whoop It Up at the Workplace
Another way to motivate employees? Offer them a fun work environment. And no, we’re not talking about Hawaiian shirt Fridays. (Yawn.) We’re talking weekly happy hours, take your dog to work days, raffles, costume parties, movie viewings and other workplace shenanigans. Get creative and ask your staff for suggestions. When employees actually look forward to coming to the office every day, they won’t focus so much on dollar signs.
4. Empower Them
Do you give your employees plenty of opportunities to take charge of projects and tap into their talents? This is one of the major contributing factors to employee job satisfaction, according to a report by the Society of Human Resource Management (SHRM). In fact, 59% of employees ranked “opportunities to use skills/abilities” as “very important” to their job satisfaction.
The quickest way to empower employees is to give them control over daily tasks and projects. Don’t micromanage your staff. Hand over the reins, step back and give them plenty of elbow room to get the job done. Not only will this give them a major confidence boost, but it will also keep them happy and productive.
5. Keep the Lines of Communication Open
One of the major advantages of a small business is that workers feel more connected to the company and its senior staff. Unlike employees who work for a mammoth corporation, small business workers can clearly see the impact their contributions have on the overall business.
This is why it’s critical to keep the lines of communication open with your staff. Touch base with them regularly about how the business is progressing and let them know how they’ve contributed to the company’s success. Ask your employees for their input and ideas, and make sure they feel involved in the big picture. This will give your small business an edge on those big, cold corporations. Your employees will think twice about leaving you for greener pastures – and even bigger paychecks.
The Bottom Line
As a small business owner, you probably can’t afford to pay your employees as much as the massive corporation down the street. Fortunately, there are plenty of other ways to keep your staff motivated, productive and loyal to your company. If you empower your employees, communicate openly and honestly with them and offer them plenty of extra perks, you’ll enjoy a productive staff and a higher retention rate.
For more ideas on employee perks, see Three Perks Business Should Give Their Employees.