“Quiet quitting” has been having a big, scary moment: According to a 2022 study by Gallup, more than 50% of the American workforce has admittedly stopped giving its all at the office.
That stat may rightfully strike fear into the heart of the average small business owner. After all, people can be your greatest asset… but they have to be engaged in the work for that aphorism to be true.
Another aphorism small business owners know well: money talks. And that holds for employees as well as employers.
Here are seven worthwhile financial incentives that can help ensure your employees stay on track and bring their all to work each day.
1. Offer bonuses
Bonuses are a great way to motivate employees to not just show up but shine. Cold, hard cash is a very tangible way to reward excellent performance.
There are many different types of bonuses to choose from, some of which may be more motivating than others. For example, a sign-on bonus for new hires could help ensure they take your offer over a competitor’s but might not lead to long-term enthusiasm and retention.
On the other hand, a bonus tied specifically to a certain goal can be a great way to ensure employees are trying their actual best to meet those metrics. And company-wide bonuses, including extra holiday pay or bonuses offered on an annual or quarterly basis, can go a long way toward increasing morale overall.
2. Give performance-based raises on a regular basis
Bonuses are just that: a bonus. But wages reward an employee for showing up day in, day out.
Many companies reassess compensation on a regular basis based on the current market or overall business performance — or by simply offering a set percentage increase to employees each year. Such a policy can help increase morale and employee retention in its own right, but performance-based raises specifically tie an employee’s paycheck to the quality of their work.
By instituting a regular performance review system, you can keep employees accountable and eager to show their very best work in anticipation of a potential salary increase. If your business structure allows for it, you can also offer employees the opportunity to move upward and outward by promoting from within to fill roles higher on the organizational chart.
3. Offer employees stock options
Although not an immediate gratification in the way of a bonus or a raise, stock options can be a very valuable source of compensation — and one that can encourage employees to stick around longer. That’s not just because they’re trying to wait out the vesting schedule: It’s a lot easier to give your all for a company you actually own, even in part.
In addition, stock options can be an affordable way to increase the value of an employee’s overall compensation package. For one thing, the money doesn’t directly come out of your company’s pocket, and for another, stock options are not deemed taxable by the IRS.
4. Incentivize employee referrals
When you find one great, engaged employee, there’s a good chance you might actually have found several. High-quality employees are often linked into networks of brilliant, high-effort people, and if you’re looking for more team members, those networks can be a gold mine.
That’s one reason many businesses incentivize employee referrals using a cash bonus. Along with helping you find pre-vetted candidates, doing so can help keep your existing workforce more engaged and enthusiastic about their position as they actively attempt to recruit their friends into the fold.
5. Institute a generous PTO policy
Paying employees not to work may sound counterintuitive as an accountability tactic.
But the truth is, well rested employees are happier employees who are more able (and likely) to bring everything they’ve got to the job. According to Dr. Kira Graves, a Forbes List member and Ph.D. in business psychology, paid time off (PTO) can help stimulate innovation and creative energy in employees, as well as helping avoid burnout.
That translates to not only better employee retention but also more ROI when employees bring great ideas back to work — great ideas that they may have gleaned while lying back on a beach somewhere.
To that end, you should also consider encouraging employees to actually take their vacations; according to a 2022 survey by PTO solutions platform Sorbet, 55% of vacation days are left on the table by employees. That may seem like a better deal for you as a small business owner up front, but actually cashed-in PTO might be far more valuable for your business in the long run.
6. Offer a 401(k) match
A robust retirement can be a major motivator for employees. Instituting an employer-sponsored retirement plan like a 401(k) is a great motivational strategy in the first place, but offering a match is even better: Even an aggressive individual saving strategy can’t beat out the leg-up employees get when their employer matches their contributions.
You can choose to match as little as 1% of an employee’s contributions — or far more than that. (Many companies offer 3% to 4%, and some go as high as 50%; just be sure to stay under the total contribution limit for the tax year you’re in.) You can also choose to offer a full dollar-for-dollar match or a partial one (50 cents on the dollar, for example). And perhaps best of all, employer contributions to retirement plans are tax deductible to the business.
7. Institute a tuition reduction policy
Helping employees continue their education pays dividends in many ways: along with increasing an employee’s retention, you’re also augmenting their skillset. There are many different ways to offer this incentive, so it can be flexible according to the circumstances of your business.
For instance, some companies offer a holistic tuition reimbursement benefit, which allows employees to claim a certain percentage of tuition coverage with caveats regarding which schools and programs are eligible. Starbucks is quite famous for its partnership with Arizona State University, which allows even part-time employees to have 100% of their tuition reimbursed for a first-time bachelor’s degree earned online.
Other companies may offer a flat tuition reimbursement or reduction benefit that can reduce an employee’s out-of-pocket costs for school with fewer restrictions — basically like a bonus with a purpose. Home Depot, for example, offers different tuition reimbursement amounts depending on employee status: at time of writing, salaried workers can get up to $5,000 per year toward tuition and hourly workers can get up to $3,000 (full time) or $1,500 (part time), along with additional percentages off books and fees.
All told, there are many ways to help keep your employees engaged in, and even excited about, their work. Not all of them cost money, but the ones that do can still be worth it. And after all, as the old saying goes, you have to spend money to make money.