15 employee incentives to offer when you can't give raises

15 employee incentives to offer when you can't give raises

“Can I have a raise?” It's the question most small business leaders dread and a request that keeps many well-meaning managers up at night. You want to give deserving employees a raise, but you don't have the budget right now.

If you've run the numbers and hosting your business lunch on Mars seems just as likely as giving raises, be honest with your employees. They will appreciate your transparency and be more understanding if there's a valid reason behind your decision. Give them an idea of when a raise may be possible and schedule a date to revisit the conversation. In the meantime, consider offering these employee incentives to fill the compensation gap.


You may not be able to offer a permanent salary bump, but a one-time bonus will boost your employees' bank accounts and morale. It also lets them know you're serious about compensating them even more as soon as you can. Decide how to allocate bonuses to employees; you may choose to give bonuses based on merit or offer this incentive after a big team success.

Flexible hours

Consider granting your star employees more flexibility in their schedule. This may mean letting them come in earlier and leave earlier or vice versa. Starting their workday 40 minutes later could let them see their child off to school or run a quick errand. Another option is allowing employees to work four 10-hour days instead of five eight-hour days. Alternative schedules not only incentivize employees but also often increase productivity and improve job satisfaction.

Work-from-home days

Remote work continues to be a huge motivation for employees. According to the Pew Research Center, 71% of people who work from home at least part of the time say it gives them a better work-life balance. Allowing your employees to work from home once or twice a week also saves them money on transportation and lunches. You may not be able to give them cash quite yet, but you can provide real benefits to your employees in the form of hybrid or remote work.

"You may not be able to give them cash quite yet, but you can provide real benefits to your employees in the form of hybrid or remote work."

Half days

Can't offer a whole day off and working remotely isn't an option, either? Consider letting your best employees work one half-day a week. You'll be amazed how much they will appreciate an extra four hours to take care of errands, spend time with family, or just relax. Consider extending this to the whole office; summer Fridays, where entire companies close early every Friday from June to September, are becoming more commonplace.

Extra (paid) time off

Too many employees have had to cut a dream vacation short or take a cramped red-eye flight to make it back to the office on Monday. Why not give your employees a few extra days of paid vacation time? They'll feel appreciated, and your business will benefit when they return feeling refreshed, re-energized, and ready to take on their tasks.

Transportation stipend

Transportation can be a major concern for many employees. Between the cost of gas and the time it takes to get to and from work each day, the price of commuting is both monetary and mental. Offering a stipend for transportation costs can ease the financial burden.

Professional development

Show your employees that you're invested in their future and professional development by offering to cover select workshops, seminars, conferences, certifications, or continuing education classes. Many companies now offer partial or full reimbursement for graduate degrees. Not only will your employees appreciate it, but you'll also know that you have people who are there for the long run.

Competitive benefits

While this may not be the most cost-effective option, offering more competitive benefits can be a huge boost to employee morale at a lower price than salary increases. Consider which additional benefits you can reasonably afford and what might resonate most with your current employees. Some popular benefits include:

  • Student loan reimbursement
  • Parental leave
  • Health savings accounts
  • Retirement savings accounts
  • Mental health coverage

7 other employee incentives

Here are seven other ways you can incentivize employees when raises are out of the question:

  • Offer employee discounts on your company's goods or services.
  • Pass along the perks, such as sports or concert tickets, that you may get from vendors or business partners to your employees.
  • Give gift cards to employees for a job well done or a work anniversary.
  • Provide free snacks and beverages to employees, or host fun events centered on food, such as Taco Tuesday.
  • Implement casual Fridays or do away with a dress code altogether.
  • Plan fun events for employees, such as a lunchtime yoga session or an after-work happy hour.
  • Ask employees about their favorite charitable organizations and make a one-time donation in their name.

In an ideal world, you could reward employees for their commitment and hard work with competitive raises. When the budget won't allow for salary increases, however, there are plenty of other ways you can show your appreciation. Use these employee incentives to keep your team members engaged and satisfied until the opportunity for a raise becomes more realistic.

More tips on ways to incentivize employees:

Turning down raise requests may lead to a deflated workforce. Check out these low-cost ways to boost morale without breaking the bank.

If you have working parents on your team, these progressive policies and benefits may go further than a pay increase.

Employees who feel unsatisfied with their pay may have higher rates of burnout. Try these six tips to motivate underperforming employees.

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