Bonuses and incentives for retaining employees
Your salesman is selling high-quality new accounts. The crew leaders and their teams are providing high-quality customer service. The maintenance department is keeping repair costs low, and the equipment is operating and looking as it should. The office staff is keeping the accounts-payable numbers low. Accounts collections are great. You have control of employee turnover. The company is now highly profitable. It's the best of times for you and your company.
Isn't it time to hand out a few bonuses and perks to the valuable staff that helped you achieve this success? After all, you could not have made this newfound profitability without them.
That crackerjack staff of yours has turned your dream into a growing, profitable and respectable grounds maintenance company. It is time to reward those who help you with something other than their regular paycheck. If you don't, some other savvy businessperson will make them an offer that they can't refuse.
Bring out the bonuses Operating a grounds-care business can be likened to many aspects of the green industry: You get out of it what you put into it. If you want dedicated, hard-working employees, you have to provide for them. And simply providing a steady salary won't keep employee morale and loyalty high. But a bonus can do the trick. A bonus or a company-offered perk is a great way to keep valuable employees humming along into the new millennium.
Once you have decided to hand out some bonuses and perks, you have another choice. Do you do it the old-fashioned way, waiting until the holiday season to hand each employee a nice turkey or ham? You could. But it may not give you much in the way of a return.
Employees today are more sophisticated. They expect you to be a little more creative.
Before you and your company begin any bonus- or perk-program plan, talk to your tax adviser to find out what, if any, tax problems it may create.
Using the company vehicle One of the easiest perks to offer an employee is use of the company truck. They are probably already driving the truck during the workday for business use. Allowing a trusted employee to drive the company truck during non-business hours should cost you no more as a bonus or perk. You already have the truck insured and are making the payments.
However, good record keeping will be the order of the day. Personal use of the company vehicle will be taxable to the employee.
Be sure that your truck--with your company name on the side--does not end up in the parking lot of a business with which you would not want your good company name associated. The trucks are good advertising. Many people will see the company name throughout your service territory. However, be aware that the truck parked in front of the wrong business could do just as much harm as seeing it regularly does good.
Membership in a trade association Another form of a bonus or perk that you can offer your employees is a free membership in one of the national or local trade associations. These memberships are an often-overlooked benefit for you and the staff. Not only will your employees receive the opportunity to stay informed about the ever-changing industry, but they also will have the opportunity for continuing education.
An educated and trained employee is a great benefit to the company. Offering to pay for this education is a benefit for the employee as well as a hidden benefit for the company. The employee has an incentive to learn and you gain a more highly skilled employee at the same time.
Cash Cash bonuses are most appreciated by employees of every industry, not just the green industry. With cash, the employee has the option to do many things. It is also one of the easiest forms of bonuses you can offer.
Remember that cash bonuses are tax deductible to the company as an expense. They also are taxable to the employee.
Cash bonuses can be directly related to company goals or work performance. Has the sales force met the goal for new accounts? Has the maintenance department been able to lower costs? Did the service crews service more customers in a week? Using set guides, you can motivate employees to increase performance. If they meet or beat the goal, they get a bonus.
Stock options In the much-talked-about dot-com industry, the most often offered bonuses or perks are stock options. This is how some of these companies attract and motivate the brightest talent in the industry. It could work for the green industry, too.
Stock options are a tricky bonus to offer the employees. The toughest, most difficult and agonizing decision in business must be made with this type of bonus program. Are you willing to give away small pieces of your business?
If you are a business owner who likes to have total control, then this is not the bonus plan for you. It involves literally giving away shares or stock in the company you have worked so hard to build.
However, this perk can build terrifically strong loyalty from the staff. After all, they will own a part of the company and have a vested interest in seeing that the customer is king.
A stock-option plan can be a way to keep the best employees and the management staff tied to the company. Bonus plans like these require a great deal of expertise.
Before starting a stock-option bonus program, hire a consultant. Consulting firms that have good credentials and a track record for providing these types of plans will be a good investment.
Insurance If stock option plans are at the top of the bonus pyramid and cash is at the bottom, then insurance plans must surely be the middle.
A good group health insurance plan will attract good employees and help keep them on the team. But there are other forms of insurance plans that can be made available.
The compensation provided to most employees consists of wages and benefits, which can often equal 30 percent or more of direct payroll costs. With a salary allotment plan, it is possible to contain these expenses while, at the same time, offering a valuable benefit with no direct cost to the company.
Salary allotment plans can be very attractive to employees. By purchasing a base of permanent life insurance during working years, an employee can avoid the prohibitive costs often associated with converting group life insurance.
Salary allotment plans are purely voluntary. Employees can take advantage of these plans to not only purchase life insurance but also obtain disability insurance, which is often overlooked in personal insurance planning.
Pick a plan Whether you choose to provide your employees a stock-option plan, a salary allotment plan or just hand out cash bonuses, perks are a proven method of rewarding employees that are doing a great job for the company.
Employees who put forth effort and do more than asked are the kind of employees your company should work to retain. Keeping these employees tied to the company is the difference between being profitable and growing the company or just barely staying afloat.
Remember. Good employees are hard to find. If you have them, hold on tight to them. Your competition is lurking just behind the next bush waiting to pounce.
David G. Gaines is president of Cavalier Asset Management. The St. Louis-based firm provides employee benefits, estate planning and investments to owners of small businesses and individuals.
Want to use this article? Click here for options!
© 2016 Penton Media Inc.