What To Do When Your Company Can’t Afford to Give a Pay Raise

When it comes to staffing, the U.S. economy continues to be a seller’s market. Unemployment rates remain at or near historic lows. There are also far more jobs available than unemployed workers to fill them. Clearly, the so-called Great Resignation/Great Reshuffle of 2020-21 has left a permanent imprint on worker demands and expectations. Combined, these factors continue to put upward pressure on employee wages, which are expected to increase 3.8 percent in 2023. (This is still below the current inflation rate of 4.05 percent.)

But while 80 percent of companies plan to give their people raises this year, not all businesses are in a position to boost salaries high enough to keep pace with worker expectations. After all, the rising cost of doing business has forced companies in many a sector to increase prices and/or cut expenses just to stay even, and this has naturally put a cap on just how high salaries can go.

So how can you keep your employees happy and productive without increasing their paychecks? The website Whatishumanresource.com suggests 20 ways companies can attract and retain quality workers without breaking the bank. Some of their suggestions include emphasizing the following:

1 - Recognition/Attention. 

Complimenting good work and celebrating individual achievements can be wonderful ego-boosters and make workers feel valued. More, regular positive reinforcement also helps habitualize the kinds of behavior you want your employees to exhibit on a daily basis.

2 - Applause. 

This is a very specific type of recognition, performed in public. Here we’re talking about literal clapping whenever and wherever it is earned as well as periodic award ceremonies for outstanding achievements. The question is, will people really work just for applause? Just ask the thousands of amateur actors who invest countless hours in community theater productions every year.

3 - One-on-One Coaching. 

Professional development is valuable in and of itself, even more so when done in an atmosphere of caring and encouragement. When coaching, even individually, don’t do it “in secret.” Other workers should know what’s going on so they can benefit and feel comfortable reaching out for help as well.

4 - Training. 

Much like general education, professional training is a never-ending process. Ensure your people are kept current on the latest skills and concepts needed to perform their jobs at peak efficiency. (Yes, this goes for you, too!)

5 - Career Path Establishment. 

Whenever possible, promote from within and let your workers know how they can advance within your organization. When employees believe they have opportunities to get ahead, they are more likely to stick around to do so.

6 - Job Titles. 

Winning monikers are a powerful way to create and develop self-esteem. Be creative with labels within your organization so your workers can be proud of what they do and the organization they work for.

7 - An Inviting Environment. 

While employers tend to discount the importance of a workplace’s physical appearance, most employees see it as a priority. You don’t have to break the bank bringing your office up to Architectural Digest levels but spending a few bucks to make it a comfortable and attractive place to ply one’s trade can often compensate for the raises you’re in no position to give.

8 - Leadership Roles. 

Allowing people to assume increased positions of authority, even in the short-term, can also be a powerful motivator. Assigning individuals to serve as ambassadors for visiting guests, run training sessions, or direct team meetings can boost ownershop and loyalty to your organization.

9 - Team Spirit. 

Take and post team photos, organize team events, or just go out to lunch as a group once a week. And don’t have just one person responsible for coordinating these events—do it as a team.

10 - Executive Recognition. 

To add yet another level of stimulation, have an exec either personally call to congratulate someone (or the group) on their success, or even show up in person and shake hands to express appreciation for a job well done.

11 - Social Gatherings. 

Scheduled offsite events enhance bonding, which ultimately creates a positive work environment and increases employee retention.

12 - Time in the Office. 

Reward outstanding performance by allowing employees to leave work early or take an extra hour for lunch. Time is money, and when employees feel they’re getting more time for themselves, they feel compensated for their efforts.

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Beyond these suggestions, I would definitely add being as giving as possible with in-office scheduling and work-from-home options. Today’s workers not only demand more flexibility in their hours, but study after study shows that working from home actually improves company productivity.

For more specific suggestions on how your company can creatively honor your workers without breaking the bank, please contact me at laura@conoverconsulting.com. I’ve been a compensation and company culture specialist for more than two decades. Allow me to help you envision a helpful plan best tailored to both your organization and your budget.