As a business owner, you are always looking for ways to save money but also ensure that your employees are well-compensated. One of the ways you can do this and maintain a talented and motivated workforce is by being creative and coming up with alternative ways to compensate them.
In this article, we’ve listed some of the strategies you can use in your business, whether it is an early-stage startup with limited funding or a more mature enterprise that will help it save some money. Please note that you’ll have to spend some money in most of these tips. However, the good news is for each dollar you spend on compensation, you’ll have squeezed more value out of it and you’ll also have minimized the cash you lost in compensating workers who did not really deliver as they were expected. Here are some creative ideas for alternative compensation for employees:
Pay for Performance
If you are about to hire someone whose base salary at the current employer is hard to match, we advise you to cushion your offer with performance incentives such as commission pay or lucrative bonus structure. Through this type of alternative compensation, employees will be paid for the value they add to your organization on top of the base salary they are currently earning. Because you’ll be mainly rewarding employees for the value/revenue they bring in, this model will significantly help you reduce the gap between the amount used to pay salaries and the business’s revenue.
Costs such as snacks, hardware, gym memberships, metro passes, parking and so on add up for an employee over the course of a year. As an employer, you can pay these expenses out of your corporate account and add it your employees base salary as an alternative compensation. Consult with your accountants first to know how much you’ll need to pay your employees as a base salary so as to save some money using this form of alternative compensation.
Reduce Risk In Case of Turnover
You can also introduce a signing bonus or quarterly bonuses in your organization as alternative compensation for employees. Both of these bonuses can help cushion or reduce your risk of loss because they will be swiped if an employee resigns too soon. If you are planning on poaching an executive from another organization to yours ahead of a stock vesting schedule or before an annual bonus, you can offer him or her a signing bonus as a form of reimbursement for what he or she will be leaving behind. Such bonuses also help businesses retain talent and the value they bring.
Training and Professional Development
Employees will be motivated to work for your firm if they know that they’ll grow and advance in their careers. Investing in their training and professional development shows that you want to see them advance and be successful. As the owner of the franchise, you should encourage your employees to take time during work to learn new skills. Even though it may cost you a few hours of productivity per month, you’ll earn it back when they leverage their new skills and become more efficient at work.