HR Headaches Series: What Can I Do If We Can’t Afford Raises and Promotions?

In a perfect world, you would be able to give each of your employees the raises and promotions they desire and deserve year after year. Unfortunately as a small business owner, you won’t always be positioned to do this, despite your best intentions.

If you’re wondering how to keep your team happy and engaged despite being unable to provide a yearly raise or promotion, here are a few suggestions you can apply to your workforce.

Give them meaningful work

When people are intrinsically motivated by their work, they will be less inclined to feel resentful of the lack of raise or promotion. Imagine you have an employee who is evaluating leaving your organization for a higher paying job. This employee genuinely loves the work they do in their current role, and they know moving to a new organization could mean giving that work up and potentially hating their new day to day.

While meaningful work won’t guarantee a person will stay with your organization, it will increase the likelihood of them staying with you for longer, and not jumping at the first opportunity for more money. So what does this look like tactically and how can you create more meaningful work? Consider the following:

• Find out what your employee’s career goals are. Perhaps there is a team they aspire to work for. While you may not be able to offer a raise, you could give them the opportunity to work on a project with that team.
• Offer opportunities to build new skills. This could be through a mentorship program, change in their position, or even a change in team.
• Remind them of the mission and vision of your company. When people understand the greater purpose of the work they are doing, it helps them stay engaged.

While meaningful work won’t guarantee a person will stay with your organization, it will increase the likelihood of them staying with you for longer, and not jumping at the first opportunity for more money.

Offer monetary and non-monetary perks

Offering a raise may not be realistic for your budget, but there are other monetary ways you can satisfy and delight your team! Consider:

• Handing out a discretionary bonus. Bonuses are a great way to bring cheer to your team and offer recognition when a raise or promotion cannot be offered.
• If a bonus is not possible, consider other monetary perks that you think may demonstrate recognition to your team such as gift cards, free lunches, a health spending account, etc.
• If there are some kind of training courses that your employees would be excited to take? Many employees may value the opportunity to grow and develop through education over a monetary raise.

Consider reviewing your company perks and policy. Is there room to create more benefits for your employees?

Another great way to entice your employees when raises are not an option are through non-monetary perks. Consider reviewing your company perks and policy. Is there room to create more benefits for your employees? Things like work from home, flexible scheduling, and relaxed dress code all cost you nothing but can go a long way in satisfying your employees (of course many of us are working from home during this pandemic, but think through your long-term post-pandemic ideas!).

Create a culture where people feel happy coming into work

Remember that your culture goes far beyond ping pong tables. If you want to create an environment where people value their workplace more than a promotion, ask yourself the following:

• Do you have a company diversity, equity, and inclusion strategy? Do people feel like they are part of an inclusive workplace? Are there Employee Resource Groups to support your minority groups?
• Do your employees feel a strong sense of psychological safety on their teams? Do they feel safe speaking up and sharing their opinion?
• Is there a sense of community when employees come to work?
• Does your company engage in corporate social responsibility efforts?
• Do you focus on your employees mental health?

Asking yourself these tough questions will help you pinpoint areas of improvement for your company culture and contribute to a happy workforce.

Seek out continuous feedback

When employees feel heard, they are more likely to want to stay within their organization. If you don’t yet have a survey engagement tool, sometimes a simple Google Sheet will do the trick!

Consider:

• Sending out quarterly engagement surveys to get a pulse for how people are feeling
• Seek out feedback on what they hope to see improved
• Take action quickly! If employees provide feedback that goes nowhere, they will feel even further disgruntled and be motivated to leave

Beyond all these ideas, always make sure that your employees are recognized for their hard work, have a clear understanding of the impact they make, and believe there is a strong level of respect for their personal and work life balance. While some employees will opt for the job with the higher salary, many people will choose the job based on alignment with the above mentioned core values and personal goals. What are you doing to keep your company happy when raises and promotions are not in the cards? Let us know!