Keeping Recruits

Strategies to help keep the new hire on your payroll.

There are three types of compensation packages: direct, indirect, and non-monetary compensation. Direct compensation for most contractors involves a competitive base wage and overtime when necessary. Other forms of direct compensation can be used to create an incentive to stay on your payroll. For example, consider a performance-based bonus plan, a safety bonus, or an attendance bonus. To implement any one of these, you will want to write and distribute “rules” or guidelines that tell employees how they can earn the bonus.

Indirect compensation includes things such as retirement plans, health insurance contributions, sick leave and other forms of paid leave of absence, and even childcare or housing assistance. Some of these can be put into place immediately, e.g., sick leave, childcare, or housing assistance, while others are longer-term programs. You can also exercise some flexibility with respect to how much you grant in terms of benefits by tying it to length of employment. In this way, the longer an employee stays on your payroll, the more that employee qualifies for the benefits or indirect compensation.

Today, the reality is most contractors offer competitive wages and some forms of indirect compensation. What sets you apart in this industry will probably depend upon the degree of non-monetary compensation in your business. Most of the plans discussed above are routine or formulaic in nature. This means that they do not require much involvement from you. That is directly opposite of the case for non-monetary compensation. Your involvement is critical.

Non-monetary compensation packages include things like career and/or social rewards, job security, flexible work hours, work from home, social events, as well as praise and/or recognition. Some of these are not practical for field labor. The ability to work from home is just not going to work for employees who are expected to prepare a job site and pour concrete. Likewise, flexible work hours will not work when the nature of your business is to work from dawn to dusk. This makes your focus upon praise, recognition, career and social rewards, and social events your best opportunity to make your business attractive enough that employees will want to stay with you.

Here are some things that you can do to establish non-monetary compensation. Brag about your good workers and emphasize how their work has benefited your business. Obviously, this works best if the employees you are bragging about hear it. You can do this in conjunction with bragging about the company success because that implies that the employees’ success resulted in success for your business. Consider starting a company newsletter which you can use to publicize the company success or your praise and recognition to key workers. Consider starting an employee-of-the-week or employee-of-the-month program, although it is probably better to provide this recognition on a weekly basis. You can also add a reward to this recognition by giving a bonus to the winning employee. In addition to the normal holiday parties that most employers sponsor, you may want to have a periodic social event at which you can take the opportunity to speak for a few moments about your company’s successes and what your good workers have done. Finally, give your workers some “surprises” along the way. For example, provide coffee in the morning, but use this as an opportunity to talk with your workers before they head out to the field. You could even surprise them by buying lunch once in a while, but you should probably give them notice a day in advance so no one brings lunch on the day you’re buying.

Perhaps the most important aspect of non-monetary compensation is tied to your attitude. If your workers see you as gruff and grumpy, they will likely find your company unpleasant and will move on in search of a better place to work. That means that you have to broadcast a positive image each and every day. In addition, you will want to say “thank you” to everyone, every day. Talk to your employees. Find out what forms of indirect and non-monetary compensation interest them most. This will help you put together a compensation package that makes employees want to stay with you.


Ed. Note: This column is Part 3 in a series focusing on hiring. Recognizing that millennial’s are not in most cases long-term employees, the first two articles focused upon new sources for recruits and effective strategies for hiring them. Visit and search using the terms: 12098595 and 12135331.