Only 24% of Small Business Owners Raised Wages in the Past Year. Here Are 3 Other Ways to Keep Employees

Inflation has been putting a strain on businesses large and small for months on end. And as a small business owner, you may have faced some tough choices over the past year in light of it. You may, for example, have needed to cut some workplace benefits, lay off staff or withhold raises due to a lack of funds.

If you went the latter route, you're not alone. Over the past year, only 24% of small businesses increased wages, according to Truist's Small Business Pulse Survey.

The problem with not raising wages, though, is that it could lead employees to dust off their resumes and apply for outside jobs that will put more money in their bank accounts. And that's surely not what you want.

The good news, though, is that there are steps you can take to retain talent even in the absence of being able to raise wages. Here are some worth considering.

1. Offer more paid time off

Many workers value time off and the option to pursue hobbies, spend time with family, and simply decompress. If you can't raise wages this year due to a lack of funds, consider increasing the amount of vacation time your employees get. If your current human resources policy allows for three weeks of paid time off, consider making it four weeks if you feel you can swing it.

Another avenue to explore? Mental health days. Sometimes, workers just need a break from the grind but don't necessarily want to use vacation time for it. You may want to offer two or three flexible mental health days that workers can take advantage of during the year when they feel they need to clear their heads.

2. Be open to flexible scheduling

You might have employees who have young children at home, or pets they need to care for. The more flexible you're willing to be with regard to things like remote work and working hours, the more appreciative your staff members are likely to be.

In fact, some of your workers might easily be willing to forgo higher pay at another job if working for you means getting to leave early to scoop their kids up off the school bus or log on at night to take a longer break during the day. And what these workers lack in the form of a raise, they might save by not having to pay for as much childcare.

3. Offer performance-based incentives

You may not have the budget to offer raises across the board. But you might have the flexibility to offer small bonuses based on performance. Not only that might help your workers feel appreciated, but it might motivate them to really do their best.

Raising wages is a great way to retain talent. But it may not be in the cards for your business this year, especially if your costs have risen. Thankfully, there are options for keeping employees happy that aren't limited to boosting pay. Consider these possibilities if you're worried that a lack of raises is about to lead to a mass exodus on the part of your staff.