Why Your Staff Are Running.

ABC news recently covered a story about government employees in the outback being offered gym memberships and fitness equipment as incentives by management trying to improve staff retention. Have these managers had too much sun, or is buying your staff a running machine really a good way to stop them from walking?


More business owners and managers than ever before are looking to establish a staff incentive scheme. The most successful businesses do not enter price wars with their competition for customers; neither do they want to enter a price war with another employer willing to pay significantly

higher salaries. To establish themselves apart from their competition they look to establish a unique selling point (USP). Now faced with the threat of a depleted workforce they are trying to establish a USP for their internal customers – their staff.

The biggest mistake business owners make when establishing a staff incentive scheme is to reach straight for their wallet. While it is vital to have competitive pay rates and regular pay reviews it can be financial suicide to use pay rises as an incentive.

Take this common example:

An owner sets a staff member a set of goals to achieve; if he is successful the staff member will receive a 5% pay rise. On a salary of $40,000 this equals $2000 per year, or $10,000 over the next five years. If instead the owner had offered an all expenses paid trip to Sydney for the weekend it may have cost about a $1000, but over the next five years it will only cost him…$1000. Yet, which is the staff member more likely to remember; a five star weekend in Sydney with their partner or an extra $128 after tax each month?

Taking the time to customise incentives to your individual employees and using your imagination might be more work than signing off a pay increase, but it is significantly cheaper and can be more enjoyable for everyone.

Some actual examples of incentives given by Australian small business owners in the last year include (costs per person in brackets);

· NRL Grand Final Tickets ($155),
· Helicopter tour of Sydney harbour ($199)
· Wine tasting tour of the Yarra Valley with lunch ($95)
· Driving a V8 race car around Eastern Creek ($199),
· Swimming with whale sharks ($350)
· Day spa massage and pamper ($350)

A Final thought: Before you spend anything; a recent survey of Australian employees found;

  • Number one reason for staying in a job: Recognition
  • Number one reason for leaving a job: The way their boss treats them