Money isn’t everything when it comes to your employment, but it does matter. Most people won’t leave a job because of money, but it can be a powerful incentive when they are woefully underpaid. Companies that appreciate their people compensate them fairly and regularly reevaluate whether their rewards package (including salary), is competitive. Here are a few things employers can do to make sure their employees stick around:
Pay above market rate
Duh – right?! What makes your company’s offer more enticing if your competitor pays the same wage for the same position? Nothing! If you want to hire and retain the best talent, then pay them what they’re worth according to the market, plus a little bit more. Most people are aware of the pay range for their position and have an excellent idea of what the market can support. Don’t take potential (or current) employees for fools – they will jump ship if you don’t keep pace with what they’re worth.
Provide regular pay raises
Oddly, over the past decade (maybe longer), I have noticed that annual pay increases have almost nothing to do with your performance as an employee. These relatively small increases (from 0-4%) are not enough to keep up with inflation, let alone reward people for their hard work and years of service. Your budget might constrain what you can pay, but increases should still (at least in my mind) be commensurate with how loyal a person is, how much they contribute to growing your business, and the outcomes that they create. Sadly, some organizations are so cheap that they don’t even provide annual cost-of-living increases (all while increasing the salaries and golden parachutes of the upper echelon of their company). IMHO, CEOs should get a pay increase LAST, and people who work on the line or directly with customers should get pay bumps first and most generously.
Bonuses
I feel like the word “bonus” is a dirty word. For a long time in my career, I was never in a position that was considered “bonus-eligible.” I never understood the reasoning for this because I am in a profession, not just some dead-end job. Unfortunately, many of my former employers didn’t see it that way. They reserved bonuses only for people holding certain positions and above. By dangling a reward in front of those employees like a carrot, they turned them into slavedrivers so they could make their numbers to bring home a bonus. The “little people” (like me, I guess) were driven hard and forced to work under high-stress conditions to enrich those above us. In my opinion, everyone who works for a company contributes to its overall success – not just those at the top and not only the “rock stars” who love stealing the show. Changing the game from an individual reward to a collective one makes it in everyone’s best interests to put in their best performance – that way, everyone wins.
Stock, stock options, or equity
When a new company “starts up,” the organization is often strapped for cash. I ran into this when I worked at a small start-up company in California. When I first came on board, I was a contractor. The company wanted to hire me as an employee full-time, but they couldn’t afford me right away. They had to wait for an additional round of venture capital funding, so they asked me to stay and take a lower-paid position temporarily to bridge the gap until they could fund my job. I believed in the company, so I agreed, and eventually, they were able to hire me. But, because it was a start-up, the salary wasn’t as competitive as it could have been. Like many start-ups, I agreed to take a lower salary in exchange for stock options. I was betting on the company’s future success (and it paid off for me – the start-up I worked for was Netflix). Other organizations will sweeten the pot by providing stock or equity in a company. It’s a gamble, and you could come out on the losing end, but it could pay off big time if you’re willing to risk it.
Compensation in Cryptocurrency
Getting paid in crypto feels a bit alien to me. Even though Cryptocurrency isn’t anything new, having people request to get paid this way boggles my mind. The fact that some companies do it is even more surprising. But, this is a crazy benefit I have seen advertised by companies, so I had to include it in this list.
Direct deposit
Who gets a paper paycheck anymore? I can’t remember the last time I received my pay in this way – I have had direct deposit for at least two decades (maybe more). The benefit of direct deposit is that you don’t have to go cash your check or put it in the bank – it’s deposited for you directly. Some employers even let you split your pay and deposit money into multiple accounts. If you have separate savings that you want to protect, this can be an excellent way to automatically divert a small portion of your check to another account or institution. If a company insists on giving you a paper check, I would probably hightail it out of there.
Commissions
Some positions are paid based on performance, especially for sales or business development roles. I have never had a job like this, but based on conversations I’ve had, this pay structure can be highly advantageous. I don’t consider myself a salesperson (although I know I’m wrong), but if you can get a client to “yes,” you can reap huge rewards.
Overtime
I have been in salaried positions for most of my career, but over time can be a massive benefit for people who get paid for their labor on an hourly basis. I know people who look for every opportunity to pick up extra time, or better yet – holiday pay. Getting paid time and a half might not appeal to everyone, but for those that have the time available and are willing to do the work, the extra cash is a fantastic thing (so long as you don’t count on it being a given).
Shift Bump
I have never been in a job that had different shifts – I guess that’s what I get for being a white-collar worker. But I have friends who do different kinds of shift work, and you can get a bump for working the schedule no one else wants to, either second or third shift. I doubt I would survive either of those shifts, but some people (nurses, police, call centers, etc.) thrive on it. And, the additional pay per hour can significantly affect some people’s take-home pay.
Final Thoughts
Money isn’t everything, but it is necessary; once a person’s monetary needs are met, they are free to pursue other interests. Companies that want loyalty and retention pay people what they are worth, are aware of what other companies pay, and use incentives to keep people happy.
If you missed the previous blogs in this series, check them out:
- Innovative Employee Incentives in the age of COVID
- Incentive #1: Work Environment
- Incentive #2: Workspace & Tools
- Incentive #3: Work Schedule
- Incentive #4: Health & Wellness
- Incentive #5: Professional Development
- Incentive #6: Time Off
- Incentive #7: Insurance
- Incentive #8: Career Growth
Check back soon for more in this series! In the meantime, what do you think about getting paid? Do you feel you are fairly compensated? What monetary rewards keep you where you are? Let me know in the comments below!