Perking Up

“I have employees who have been with me for quite a while and I’d like to give them raises… but can’t afford a higher payroll. What are my options?”

Your HR Survival Tip

It’s been years since employees realized a noticeable increase in wages. Unfortunately, those 1-3% increases are just as likely to shift your employees to a higher tax bracket so they actually see less on their paycheck. As companies have struggled to survive, employees are also struggling to live on static wages.

Giving an employee a raise has a rippling financial effect. Your payroll taxes and your workers’ compensation insurance premium will go up because they are based on overall payroll. It’s also hard to reduce those wages if times are hard again… you can do it legally but it’s hard to retain employees when a pay cut is necessary.

Now is the time to think of what other options you have. “Perks” have always been a standard in management positions and it’s time to consider what perks you might implement for the rest of your staff. This is becoming a popular method for rewarding employees when raising wages isn’t an option. Here are a few things we’ve heard about:

  • If you don’t offer any paid vacation time, develop a bonus program that rewards employees with paid days off instead of cash.
  • Give out an occasional discretionary bonus. Even if it were equal to what they might earn with an increase for the year, it still costs you less overall.
  • Cover a higher percentage of health insurance premiums or add an additional insurance.
  • Pay for a gym membership.
  • Provide commuting subsidies.
  • Create a monthly bonus plan where the “bonus” is their choice from a group of items you have available. These are typically items for personal use and could be a $25 gift card to a local restaurant or even an electric toothbrush.
  • Provide tuition reimbursement if your company encourages continued education.
  • Give out $25-100 gift cards for outstanding performance.
  • Provide a turkey or ham and a $300 grocery store card just before the holidays.
  • Add another holiday just for this year.
  • Arrange for a dry cleaner to come to your facility to pick up and drop off cleaning.

Deciding which perks to offer is a matter of testing to see what will work best and be most appreciated by your employees. Just because you love a particular perk doesn’t mean they will. Make sure this is a positive experience for them.

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