Record low unemployment rates and a rapidly growing economy are placing a premium on skilled workers. Many employers are struggling to fill jobs and worry that some of their current workforce could jump ship to seek out better opportunities elsewhere.
Employers may have a reason for their concern. The number of positions waiting to be filled increased by 117,000 in July 2018 to 6.94 million, according to the Job Openings and Labor Turnover Survey from the Bureau of Labor Statistics. The same survey found that the “Quits” rate rose to a 17-year high of 2.4%, with 3.58 million Americans quitting their jobs.
What can employers do to ensure that their best and brightest workers stay in place? A combination of common sense, pay, benefits, and nontraditional rewards can help keep employees focused, connected, and loyal.
Respect and Responsibility
High-performing employees want to be respected for their skills, experience, and judgment. Moreover, high performers generally thrive on challenges and want the freedom and autonomy to work without someone looking over their shoulder at all times. Giving such employees respect and a degree of independence generally won’t cost you much financially. However, the payback in loyalty and productivity can often be significant.
Low-Cost Incentives
Not every incentive has to have a price tag attached. Non-monetary awards — from recognizing an “employee of the month” to a heartfelt face-to-face expression of gratitude for a job well done — can be remarkably effective and can leave a lasting impact on employees. Inexpensive incentives can include gift certificates, cash spot awards, and even extra paid vacation days.
Incentive Plans
Incentive plans reward employees for their achievements and create a sense of accomplishment. Plans can be used on a one-time basis or as an ongoing program. Plans may also be tiered, such as short-term rewards for monthly or quarterly achievements or long-term rewards for annual achievements and years of service. Some employers craft incentive plans based on multiple goals with a percentage of the rewards determined by the level of success that’s reached on each goal. Plan types include:
Annual incentive plan: Rewards are tied to expected results that are identified at the beginning of the performance cycle.
Discretionary bonus plan: The owners/managers determine the size of the bonus pool and the amounts that will be given to individuals after a performance period. Typically, payouts from this type of plan are not guaranteed nor is there a predetermined formula.
Profit sharing plan: Such plans typically include a predetermined formula for allocating profit sharing amounts among participating employees.
Small-group incentive plan: This type of program focuses on the performance of a small group within a business, very often a work team. Employers use these programs when measurable output is the result of a group effort and it is typically difficult to identify individual contributions.
Retention bonus: This is a payment beyond a regular salary that is used to incentivize an employee to remain with the business, particularly during a critical period.
Project bonus: This is a reward granted to an employee or to a department for completing a project successfully and within a specific time period.
Savvy employers understand that attracting and retaining high-performing employees is critical to their long-term success. Putting together an interconnected system of rewards can go a long way toward helping them achieve this goal.