First published at https://www.get5.io/blog/financial-incentives-employees
How do you keep your employees happy? How do you keep your employees engaged? What allows your company to set itself apart from others in your industry?
While there are many ways to keep your employees happy and engaged, providing financial incentives is one of the best.
After all, everyone wants more money in some way, shape, or form.
The most obvious way to provide financial incentive is through a pay raise. And while that’s something you’re likely to do regularly, you don’t necessarily have to stop there.
5 Other Types of Financial Incentives
Pay raises may be on your radar, but there are other types of financial incentives you can also provide. And of course, if it makes sense for your company, you could use these incentives in exchange for regular pay raises.
Here are five ideas to consider:
There’s nothing better than a steady salary. With this, your employees know that they’ll receive the same amount of money — give or take — with every paycheck.
However, there’s no better way to get your employees excited than with a bonus.
You can give out a bonus for any reason, with some of the best including:
- Holiday season.
- When your company hits its financial goals.
- When an employee, department, or company as a whole performs at a high level.
- On anniversary dates, such as 10, 15, and 20 years with the company.
You don’t want to go crazy with bonuses, but when employees know they’re available they’re more likely to work hard to secure the cash.
If you plan on adding bonuses to future paychecks, take into consideration the payroll implications. You must have the right system in place to make payments and withhold taxes.
In much the same way as a bonus, a commission payment is one that’s made in addition to regular wages.
While earning commission is most common in the sales profession, it can be used in other performance-based positions, too.
Commission is usually defined in relation to services such as brokerages or sales:
A commission is a service charge assessed by a broker or investment advisor for providing investment advice or handling purchases and sales of securities for a client.
For example, a company may pay salespeople a commission on every sale they make. This gives them more reason to perform at a high level, as they know their success will result in additional compensation.
3. Retirement Plan Contributions
There are many benefits of contributing to an IRA and/or 401(k). Most importantly, it positions your employees to retire with enough money to enjoy their life.
But there’s a problem with that: some people don’t take the time to invest in their retirement accounts. Instead, they live in the “here and now” and simply hope for the best in the future.
For those interested in contributing to a 401(k), you can use this as a financial incentive. For instance, matching contributions is sure to excite your workforce.
This is free money that will benefit them in the future.
4. Full Medical Benefits
There used to be a time when employers covered 100% of their employees’ medical insurance. And while you may still find companies that do so, they’re few and far between.
While employers with 50 or more full-time employees are required to provide some level of insurance coverage, consider providing 100% health insurance coverage to your employees if you can afford it.
This is a great way to save them money, while also helping them receive top-of-the-line medical care.
If you can’t afford to pay 100% of their premium, purchasing a more comprehensive group medical insurance plan is another great perk.
5. Life and Disability Insurance
When it comes to insurance, most employees turn their immediate attention to medical coverage. And while that’s important, it’s not the only type you can provide.
Life insurance is one of the best financial incentives for employees.
It may not be the most exciting benefit, but it’ll give your workers and their families peace of mind.
Short and/or long-term disability insurance is another option. With this, your workers have an outlet for receiving compensation if a disability — related to an injury or illness — prevents them from working.
Just the same as life insurance, disability insurance is one of the better ways to provide peace of mind. Most employees will never use it, but it’s nice for them to know that it’s available if it’s necessary.
Final Thoughts on Workplace Financial Incentives
Rather than maintain the same basic approach to employee benefits, look into the ideas above. Sometimes, it’s the most unusual perks that get employees the most excited.
When you incentivize your team, you give them a reason to pull together and work toward common goals. Not to mention the fact that it also helps with motivation and productivity.
What financial incentives have you offered employees in the past? Did you receive positive feedback?