What to offer your employees when you can’t offer a raise

Rae Roache


“Can I have a raise?” It’s the question most small business leaders dread and what keeps many well-meaning managers up at night. It’s not that you don’t want to grant your employees a raise — especially when they deserve it — it’s that you simply 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 affording a raise, it is best to just be honest and explain the situation. Your employee will appreciate your honesty and be much more understanding if there’s a valid reason behind it. It’s also important that you give them an idea of when a raise might be possible and schedule a date to revisit the conversation.

In the meantime, there are other perks you may be able to offer to help fill the compensation gap, ease their expenses and show just how much you value them as a member of your team.



You may not be able to offer a permanent salary bump, but a one-time bonus will provide a big boost to your employee’s bank account and their morale. Plus, it lets them know you’re serious about compensating them even more as soon as you can. 

Flex hours

Consider granting more flexibility in your star employee’s schedule. This might mean letting them come in earlier and leave earlier – or vice versa. Starting even 40 minutes later could let them see their child off to school or drive their spouse to work. Another option? Letting the employee work four 10-hour days instead of five 8-hour days.

Work from home days

Allowing your employee to work from home once or twice a week saves them money spent on transportation and lunches and also gives them time back in their day. You may not be able to give them cash quite yet, but you can provide a better work-life balance.


Can’t offer a whole day off and working remotely isn’t an option, either? How about letting you best employees work one half-day a week? You’ll be amazed how much they will appreciate an extra four hours back in their schedule to take care of errands, spend time with family or just relax. Maybe, just maybe, you could extend this to the whole office, too? Summer Fridays, where entire companies close early every (you guessed it) Friday from June to September are becoming more commonplace each year.

Extra (paid) time off

Too many of us 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 awesome employee a few extra days of paid vacation time? Your employee will feel appreciated and your business will benefit when they return feeling refreshed, re-energized and ready to take on the world.

Transportation stipend

Between the paying for trains tickets, late buses, high gas prices, tolls and avoiding that old crater-sized pothole every day, the price of commuting is both monetary and mental. Offering a stipend for transportation costs can ease a bit of anyone’s financial burden.

Tuition reimbursement

Show your employee you are invested in their future and professional development by offering to cover select workshops, seminars, conferences, certifications or continuing education classes. Many competitive companies now offer partial or full reimbursement for Master’s degrees. Not only will your employee appreciate it but you’ll know that you now have an employee who is there for the long run.


Want more advice on building your small business? Check out the essential elements of a standout recruitment strategy here.

Previous Article
How to Involve Employees in the Hiring Process
How to Involve Employees in the Hiring Process

You depend on your small business team for input on other vital matters, so why not involve them in the hir...

Next Article
6 questions that help you get the most out of reference checks
6 questions that help you get the most out of reference checks

Here are 6 ways to get the most out of your preference checks.


Get the latest hiring trends delivered to your inbox.

More resources headed your way!
Error - something went wrong!