However, many businesses won’t have the resources to award pay increases every six months or battle with increased costs. Our latest SME survey found 51% of employers predicted rising costs would be a major challenge for them in 2023, closely followed by a recession (46%).
So, is there an alternative to salary increases or one-off bonuses?
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Employers can be much more creative when it comes to pay and rewards. By implementing initiatives to support employees and support revenue growth, businesses will be in a stronger position in the long term.
Here are several options for employers to consider.
Share-save schemes
Share-save schemes have become an increasingly popular option over recent years. In fact, HMRC received more than 430 applications for employee ownerships trusts in 2022, compared with just 19 applications five years ago.
A share-save scheme, or employee ownership trust, enables employees to own a share in your organisation. Adopted by businesses across the board, including start-ups with fewer than 10 employees, these schemes enable firms to raise capital while allowing employees to invest in the organisation.
The ownership effect helps to increase employee engagement by allowing them to develop a deeper personal connection to their workplace. When employees are personally invested, everyone is empowered to work towards the same goal. This increases job satisfaction.
Retaining your top performers is critical, especially if you have growth plans. At a time when businesses are already competing for top talent, incentivising employees with shares will differentiate you from other organisations and increase loyalty in your team.
Our recent survey found that 50% of employers believed employee retention would be the most important aspect of people management in the next 12 months.
Employees who recognise their performance’s direct impact on the business are likely to be more motivated to work harder and be more productive, knowing it could boost their personal finances.
Employee incentives
This is not just for the sales team. How many employees communicate with your customers regularly? Could staff be rewarded for cross-selling other products, upselling to higher packages, or even helping to retain your most valuable clients?
By introducing incentives to staff members, who aren’t just in sales, they will be encouraged to think creatively, present alternative solutions, and deliver an excellent customer experience.
Think about your key business objectives and how your team can help achieve them. For example, have you recently introduced a new product or service?
Why not offer staff a percentage of the fee if they sign up one of your clients for this? Have some of your key clients served notice or moved to a competitor? Why not incentivise staff to keep clients or generate recurring business to help protect your bottom line?
In return, staff will be more motivated to increase revenue, especially if they can gain from it.
Rewards platforms
There are so many reward platforms available to employers. For example, discuss incentivising employees through shares, bonuses or discount platforms. Employers could provide various discounted lifestyle benefits, such as family days out, grocery shopping, restaurants etc., for their team members.
But there is scope to leverage these rewards, contributing to employee engagement, motivation and productivity.
Consider implementing a scheme where staff can be recognised for exceptional performance and receive a voucher via a rewards platform, to use on an item or benefit of their choice.
For example, enable staff to nominate colleagues who have worked hard on a project, gone above and beyond to meet a client’s need, or exceeded their KPIs. This will improve employee engagement and encourage staff to strive for success with the knowledge that they will receive recognition and rewards.
Greg Guilford is CEO of HR Solutions, part of WorkNest
