A recent About.com article cited research by Harris Interactive showing the most serious threat to organizations in this recession might be the recession's end. More than half of survey respondents report they are likely to look for a new job when the economy turns around due to the mistreatment and disengagement experienced during the recession. This fact may be especially damaging to small businesses that already have a hard time attracting and retaining talented employees due to their limited resources.
“Many small businesses find it difficult to hire top quality talent as well as retain them,” asserts Ron Stone in an article on HRresource.com. Stone lists four main reasons that small businesses may feel at a disadvantage compared to their larger businesses. These include having a fewer opportunities for career development, lower compensation and benefits and a less structured work environment. Small businesses can engage employees with award programs and proactively combat the four negatives that Stone presents.
Although small businesses have fewer positions and a less structured work environment than larger companies, mentoring and training award programs help to encourage employees to gain new skills in multiple areas. Leaner business models allow employees to learn and develop skills outside of their discipline thus making work more interesting and rewarding for workers. When small businesses offer recognition and rewards to workers for completing mentoring and training activities, they motivate employees to take an interest in their career development. In addition, mentoring and training award programs increase the value of employee contributions and raise their flexibility to work in several positions.
Tax regulations force employers to tax employee compensation along with any cash incentives they earn, however merchandise-based employee awards are often not subject to the same taxes. Instead of having to spend more budget on grossing up an award’s value in order to reduce the impact of taxes, small businesses can utilize the power of recognition awards to engage employees while not having to tax employees for the gift they earn.
According to The Incentive Research Foundation, it will cost a small business between 100 to 200% of an employee’s salary to recruit and train a replacement. By coupling the entrepreneurial spirit that exists at small business enterprises with the power of employee recognition and rewards, employers can engage their staff. If small businesses engage employees with award programs, worker turnover can be reduced by 53% on average.