Recession-proof Employee Loyalty Plan
Eight ways to show your employees the love when you can’t show them the money.
by Ed Hess and Charlie Goetz
be in one of the longest economic tough periods in recent decades, but
if you’re a small-business owner, that doesn’t mean less work for you.
On the contrary, it means there’s much more. You’re hustling to attract
more customers, bending over backwards to keep the ones you have and
scrambling to keep up with the day-to-day tasks that keep the business
flowing. If you’re lucky, you don’t have to shoulder this extra work on
your own because you have a team of hard-working employees toiling right
alongside you. But here’s the real question: In the (understandable)
absence of raises and bonuses, how long can you expect them to stick
Our economic situation will not always be this bad. Sure, your employees
will stay with you while the job market is poor. But if they feel like
you haven’t treated them well or appreciated their hard work during the
slow economy, they’ll move on to greener pastures when things turn
around. That’s why slowdowns like this one are critical times for caring
small-business owners wrongly assume that employees respond only to
money, a belief that’s distressing indeed in these cash-strapped days.
In times like this, it is important to go back to basics and remember
that employees want the same things owners want: to be appreciated, to
be listened to and respected, to have a chance to be all they can be and
to be part of something special.
second-grade teacher make you feel good by paying you money? No, she
gave you a gold star to commemorate your achievement and told you what a
great job you did. That principle works in the business world, too.
many great ways to keep up employee morale and build loyalty that can
cost you very little or even nothing. You just have to pay attention to
your employees’ needs and be creative. For example:
“Thank you!” It’s so simple, it almost seems silly to mention it, but
just telling your employees “thank you” when they’ve done a great job
will go a long way. Verbal recognition of the work they do will not only
keep up their morale, it will increase the mutual respect that exists
between the two of you. As a result, they’ll not only work hard for you
but they’ll stick with you through thick and thin.
such a simple thing to do it’s shameful that more business owners don’t
take advantage of it. Overworked entrepreneurs sometimes get the
attitude that they’re working hard so why shouldn’t their employees?
Well, if they don’t feel appreciated, their hearts won’t be in their
work, even if they are putting in the face time. A sincere “job well
done” to them is a small price to pay for that extra bit of effort that
makes all the difference.
2 Give them
inexpensive bonuses. While money is tight, you can’t give your employees
significant raises or bonuses, but you can show your appreciation with
other small, less pricey rewards. A few great options include a gift
certificate to a local restaurant or tickets to a show or ball game.
Alternately, consider giving them an afternoon off with pay.
thank-yous allow you to show your employees that you appreciate them and
care about them as people. And they show your employees you think of
them as more than just a way to make money.
them with free meals. The quickest way to your employees’ hearts is
through their stomachs. Providing a catered lunch once a month or
doughnuts in the morning is a great way to keep up employee morale and
thank your employees. Also don’t forget to take advantage of birthdays
and anniversaries. Celebrate each of them with a small party (that
includes cake!), and not only does it show your employees that you
appreciate them but it provides a great opportunity for everyone to get
together, mingle and have an enjoyable time at work.
them! You might want to a have a better system than Michael’s “Dundies”
on The Office, but coming up with a way to award great work at your
business is a fun way to show your employees that you value their
it’s a simple blue ribbon or a framed certificate, present the award in
front of all of your employees, and tell them exactly why you are giving
it. This provides the employee being awarded some time in the spotlight
and gives you an opportunity to reiterate to your employees that quality
work is valued at your business.
them a thank-you note. Taking the time to write a short thank-you note
to a hardworking employee is always well worth it. Let the note be a
nice surprise by leaving it at the employee’s workstation or by mailing
it to his or her home. And make it specific—“Thank you for staying late
last Thursday to help with those wedding designs” is a lot more powerful
than a vague “Thanks for all your hard work!”
surprised by how much these notes are valued by your employees. It
reminds them that you value the work they do for you. And it reminds you
that your employees are a big reason why you are able to keep your
business going in these tough economic times.
6 Help them
improve themselves. Your employees appreciate it when you are willing to
invest in their future and help them widen their horizons. You can do
this by paying for them to attend a class or a seminar that interests
employees decide whether the classes are work-related or not. If they
are, great! You’ve paid for them to learn skills that will help them do
their jobs better. If they aren’t, that’s great, too, because you’ve
likely helped them build on areas that will make them feel better about
themselves and thus make them happier employees.
7 Help them
get healthy. Providing your employees with a gym membership can have
multiple benefits. It’s another great way for you to say thank you and
help them improve their lives, but there are other benefits as well.
First of all, you might be able to get a group deal at a nearby gym so
the cost to you won’t be very significant. Secondly, your exercised
employees will have more energy that they will expend at work. Finally,
their improved health will help you save on health insurance and paid
8 Ask them
what they’d like to improve about the business. You might be surprised
by what you hear. One employee might suggest some new office chairs
while another might suggest a new way for processing orders. Either way,
they will be changes that will help them do their jobs better. It will
make them feel like they have some ownership in your company—plus, it
can be hard for an employee to leave when he feels that he has helped
build your company into the great business it is.
remember, once you’ve asked your employees what they’d like to change,
there’s no turning back. You must take their suggestions seriously and
show them you value their suggestions by acting on some of them as
quickly as possible.
employees know that times are tough, so it is unlikely that they are
going to be screaming “Show me the money” at you. But when all of this
is over, you don’t want them looking back and thinking, “Man, I really
worked hard for my boss when he needed me and not once did he say ‘Thank
you.’” Your employees want to do a great job for you. They want you to
care. So show it to them! It’s that simple.
About the authors:
lives in Charlottesville, Va., and spent most of his business life
advising entrepreneurs and financing their business ventures. He went to
college at the University of Florida and to law school at the University
of Virginia and graduate law school at New York University. Mr. Hess’
professional career was spent with firms like Atlantic Richfield Company
(ARCO), Warburg Paribus Becker, Boettcher and Company, the Robert M.
Bass Group, and Andersen Corporate Finance, and he has built three
Mr. Hess began teaching business students part-time at Goizueta Business
School, Emory University, during which time he created and taught the
entrepreneurship course. In 2002, he joined the faculty at Goizueta full
time as an adjunct professor, where he became the founder and executive
director of both the Center for Entrepreneurship and Corporate Growth
and the Values-Based Leadership Institute.
2007, Mr. Hess joined the faculty of the Darden School of Business at
the University of Virginia as a professor of business administration and
Batten executive-in-residence, where he teaches courses on building
small businesses and organic growth. Mr. Hess has written five books in
addition to the latest, So, You Want to Start a Business? 8 Steps to
Take Before Making the Leap, which he co-authored with Charlie Goetz.
Goetz earned his college degree at Emory University and holds an MBA
from the University of Texas. He is a serial entrepreneur who built
several successful businesses, which, in total, employed more than 1,500
people. After selling most of his businesses, Mr. Goetz began teaching
entrepreneurship at Emory University in the Goizueta Business School. He
has earned multiple teaching awards.
Goetz lives in Atlanta, Ga. He is an investor in several new businesses
and consults with people starting businesses. His specialties are
marketing, customer acquisition and product development.
So, You Want to Start a Business? 8 Steps to Take Before Making the Leap
is available in bookstores nationwide and from all major online
booksellers. For more information, visit