by Joe Blattner | October 11, 2010
While economists are happy to report that the economy is looking up, your balance sheets tell you differently. Your business is in a slump and has been for several quarters now. You know that you need to make cuts somewhere, but where?
While employee benefits and incentives are crucial to a productive, happy workforce, sometimes they need to be trimmed to balance the budget. When you have to make the hard decision to cut incentives during a tough economic time, follow the tips in this guide to minimize impact on employees and recover as quickly as possible when the economy rebounds.
- Don’t fool yourself. Take a hard look at your finances and make a realistic decision about what you need to cut. Many companies start out by cutting out too little, ensuring a slow, painful death for the company.
- Be transparent. By showing your employees your financial situation and inviting feedback, you can help people understand why some of their benefits need to be cut.
- Make cuts from the least necessary benefits to the most necessary. While health and retirement benefits may make up most of your compensation package, your employees would probably agree that these are the most important benefits they see. Before you go after incentives that people depend on, try to cut out things that aren’t absolutely necessary like company parties, vehicle usage and education reimbursement.
- Start cuts at the top. Your management team probably enjoys the most benefits anyways, and when your employees see that their management has already made real sacrifices, they’ll be less likely to complain when they are asked to do the same.
- Reinstate benefits when the economy rebounds. Many times, when a company cuts matching 401(k) contributions or raises health insurance premiums, those benefits never come back. If you reinstate benefits as soon as your company gets healthy again, you’ll be able to show your employees just how valuable they are to you.
It is important to remember that we often tell our employees when we cut their benefits, but we rarely tell them what all of their benefits mean to them.
You can quickly and easily share with your employees how much their benefits are actually worth at any moment through total compensation statements. View a sample statement to learn more.
by Joe Blattner | April 6, 2010
Ask most employees if they’d rather have cash or non-cash incentives, and they’ll choose the cash incentives almost every time. However, as an employer, you have many other factors to consider when choosing an incentive other than whether or not employees say they want it. Carefully consider the benefits and drawbacks of cash bonuses before creating your incentive program.
Benefits of Cash Incentives
- Nothing talks louder than cash – Many employers find that as soon as they offer cash incentives for a task, their employees start working harder. For fast, effective gratification, few incentives work better than cash.
- Easy to distribute – Cash incentives require little extra effort on the part of an employer to distribute. Money can either be added to a paycheck or distributed as cash.
- Practical – Many non-cash incentives appeal more to some people than others. While some employees may not need a new iPod or tickets to a sporting event, everyone can benefit from a little extra cash.
Drawbacks of Cash Incentives
- Can become viewed as base pay – When employees receive cash bonuses on a regular basis, they can come to expect them as part of their base pay. For example, many people rely on their annual Christmas bonuses or quarterly commission checks to pay their bills. If these benefits ever have to be taken away, things could get ugly fast.
- Disappears quickly – Cash incentives are often quickly forgotten because they are spent on necessities – things like bills, debt or Christmas presents. On the other hand, even small non-cash incentives like movie tickets, electronics or gift cards are remembered long after they’ve been received.
- Takes the joy out of incentives – Non-cash incentives often make a more positive impact because they are viewed as “treats,” while cash incentives are often seen as more practical.
The best incentive programs often involve a mix of cash and non-cash incentives. To show your employees how much their non-cash incentives are worth, consider total compensation statements through COMPackage.
by Joe Blattner | January 5, 2010
While you may not be able to offer your employees extravagant benefits like an onsite gym or a cafeteria with gourmet food, there are many simple things you can do to show your employees you appreciate them.
1. Say Thank You
A simple word of appreciation is not only free, it is also one of the best ways you can recognize an employee. You can say “thank you” for a job well done through a personal card or email, a few spoken words or a formal recognition program.
2. Provide Free Food & Munchies
People appreciate few things more than free food. Providing free snacks or drinks throughout the day can be a great way to keep employees happy. If you don’t want to offer free snacks every day, you could choose to have a donut day once a week or a pizza party once a month.
3. Start an Employee Wellness Program
Keep employees healthy through a wellness program. Some wellness program ideas are gym membership reimbursements, smoking cessation incentives or free flu shots. Not only do employee wellness programs keep morale high, they can also help cut down on costly sick days.
4. Small Gifts & Rewards
While you may not be able to afford to hand out big bonuses every month, you can probably set aside a few dollars for rewards like movie tickets or gift cards.
5. Paid Time Off
An easy way to show love to your employees is to give them time off for a job well done. You could even throw in an extra day off for their birthday or their company anniversary. Depending on your business needs, flex scheduling that allows employees the freedom to create their own schedule can be a valuable benefit.
Do you have any additional ideas for inexpensive employee benefits? Please leave them in the comments below — and thanks for sharing!
Show your employees the monetary value of their benefits through COMPackage benefit statement software.
