Financial incentives attract skilled employees, but non-financial incentives such as decision-making opportunities, recognition, and advancement opportunities are key to retaining them. Non-financial incentives are not monetary but can be just as valuable.
When trying to attract highly skilled employees, financial incentives are important and often a pay raise or good benefits package is what will bring new employees to a company. Retaining these employees once they’re hired, however, isn’t always simply a matter of financial incentive. Many times people will stay with a company because of the non-financial incentives it offers. These may include the opportunity to participate in important decisions, opportunities for advancement and recognition for a job well done.
It is important not to confuse non-financial incentives with financial incentives. Anything that costs the company money, such as stock options, health care benefits, or even free coffee, can be considered a direct or indirect financial benefit. The employee does not receive the cash, but there is a type of cash value that can be attached to those items. Non-financial incentives don’t equate to a specific amount of money, but they can be just as valuable when trying to retain good workers.
Allowing employees to participate in decision making can be one of the non-financial incentives that is highly motivating. The ability to speak your mind about what is happening in the company, especially regarding the employees who are involved in the decision, can help people feel respected and included and that the company values their input. Employees are much more likely to feel valued when the company solicits their input on important decisions.
Recognition for a job well done is another non-financial incentive that can help an employee feel that the company is aware of and appreciates the work they are doing. Bonuses and boosts are certainly valuable, but not always practical. Often a company can provide nothing more than a certificate of appreciation, yet employees so recognized tend to report a higher level of job satisfaction than those who receive nothing. Simply being praised for an achievement is often an incentive for employees to try harder.
The opportunity for advancement within the company is among the most popular of the non-financial incentives. With advancement can come salary increases and benefits as well as personal satisfaction. Knowing that they will be able to move within the company is a powerful motivator for many employees. Other types of non-financial incentives include things as simple as the employee’s job title. Many people prefer to have more important-sounding job titles, such as sanitation engineer rather than garbage man or sales executive instead of sales clerk.
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