As an IT business owner, you might not have the means to boast frequent raises and lucrative salaries like larger firms. So how you can motivate your tech employees to put in the extra effort without paying them big bonuses?
Some answers can be found in Dice's annual survey of IT salaries. This research provides insight into tech employees' expectations for monetary and non-monetary motivation, as well as what you can do attract top talent and reward it without breaking your budget. Let's take a look.
An Incentives Number Game for Small IT Businesses
According to Dice's study, IT employers motivate their workforce by offering…
- Increased compensation (17 percent).
- More interesting challenges (12 percent).
- Flexible work location and telecommuting (12 percent).
- Flexible work hours (10 percent).
- Promotion of new title (3 percent).
While offering raises is the leading motivation tactic, it's only by a narrow margin. Nearly as many businesses are using more interesting challenges and flexible work options to reward and motivate their workforce.
If you add up the percentages above, you'll notice they don't add up to 100 percent. What gives? Well, one-third of employers don't offer these motivation tactics at all.
You can distinguish your business from other companies by offering job applicants attractive benefits that will make the job more appealing than the competition. While you're interviewing candidates, don't forget that you're also selling your business to them. Tout the financial and non-financial perks that come with working at your business.
Compensation Complications: A Guide to IT Employee Raises
Say you want to give a raise to one of your employees. How much should you give? That question seems like it should be simple, but it's not. It's actually quite complicated. Factors you may consider include…
- Your area of IT. Last year, software engineer salaries increased 4.1 percent, but web designer salaries decreased slightly. IT salaries increase or decrease depending on supply and demand in that area of IT. You can check Dice's annual survey or use the Occupational Outlook Handbook from the Bureau of Labor and Statistics to explore median salaries for various IT professions.
- Your location. All salaries vary from location to location. With the cost of living higher on the coasts, you might have to pay more for employees in these areas. Year-over-year changes can be startling. For instance, IT salaries in Nebraska rose seven percent in 2014. Keep track of what other IT employers are paying in your area and make sure your offers reflect these changes so you don't lose top talent.
- The overall state of IT job growth. On the whole, IT salaries increased 1.9 percent in 2014, which is a fairly typical number for IT salary growth. If things are going well and business is steady, offer at least a modest cost-of-living salary increase.
Remember to add these salary increases to your budget. You don't want to be caught off-guard if an employee asks you for a raise.
Reward Your Employees, Reward Your Business
When you're juggling the day-to-day affairs of a small business, it's important to remember to take time to reward and recognize the talent in your office. And that doesn't have to mean opening your pocket book. You can do a lot by offering other benefits and incentives. Whatever strategy you use to reward your employees, don't overlook this vital part of successful employee management. Schedule yearly performance reviews and build-in other regular evaluation and incentive programs.
If you're looking for more HR tips, check out previous blog posts on hiring and human resources management at small IT companies.