• May 7, 2020

7 Ways to Boost Employee Morale Without Breaking the Bank


I.      With the cost to replace an employee at approximately 150% of their annual salary, top managers can’t afford not to develop an employee retention program. To put that in perspective, if your average employee makes $40,000 per year and you average 10% turnover, your cost per employee is $60,000 or $600,000 per year when you factor in the 10% turnover rate. Now, you don’t see all of those dollars in your bottom line. That includes the time it takes to recruit, lost production, possible lost sales, fees paid to employment agencies, etc.

No doubt that happy employees help businesses thrive. Happy employees account for up to a 12% increase in production according to a study done Warrick Business School. On the other hand, a disgruntled employee can be detrimental to your company. Disgruntled employees have been known to:

•    Create irreversible damage to your brand

  • Alienate your most valuable clients and cause very expensive mistakes. Many unhappy employees have direct contact with your best customers. Negative comments made, or just body language can cause great damage to your reputation.
  •  Leak important company information and participate in internet “bad-mouthing.”
  • Stop potential hires from joining the company. You may be losing the opportunity to hire top talent due to word of mouth negativity by your disgruntled employees.
  • Cause others around them to be upset and disengaged in their work. A disgruntled employee and their attitude can be infectious and spread throughout the company. They will try and get as many as they can to get to feel the way they do, reducing production and increasing turnover throughout the company. When they leave, they will try and get others hired at their new company.
  • Be guilty of theft, tardiness, missed deadlines, etc. A disgruntled employee will always use every sick day given to them, and usually more. Whenever they are out, others have to cover for them, and when others see this employee taking all the time off, they become unhappy.

If you don’t think employees' attitudes can have a huge impact on public perception, let’s look at two companies. Both are very successful yet one seems to always be in reputation management mode. Looking at Walmart and Starbucks, both have employees very visible to the customer, and in direct contact with them. Yet, Starbucks is perceived as a great place to work whereas Walmart is not. Whether it’s walking through Walmart and looking at the employees or hearing news clips on the TV or social media, Walmart employees don’t seem to be happy. Is Starbucks that much better of a place to work? Do they pay much more? Is it much more fun making those difficult to understand coffee drinks all day? Whenever you walk into a Starbucks, you see a happy, friendly Barista greeting you and asking what they can get for you. What you order and how you order it is key to making you feel special. Like getting a BMW or iPhone. I was recently at the tail end of a big rush at a Starbucks, and once the rush was over and everyone was served, the manager walked around to each employee and said “good job” and thanked them for the great work they did with getting everyone served during the rush. Would you like to work for a manager like that? Wouldn’t you like to work for a company that hired people like that? Of course you would.

According to an analysis conducted by the Gallup Organization, disengaged employees cost the American economy up to $350 billion in lost production.

If you feel you have an above-average turnover in your company, you could be losing thousands in lost revenue.

Here’s what some studies show with regards to the cost of employee turnover.

  • To replace a salaried employee, it costs up to 6 to 9 months’ salary. For a manager making $40,000 a year, that could be between $20,000 to $30,000 in training and recruiting expenses.
  • For an executive-level employee, it could be as much as two times their annual salary.

With predictions all over the board, how do you figure out the true cost of employee turnover?

In an article on employee retention, Josh Bersin of Bersin by Deloitte outlined factors a business needs to consider when calculating the “real” cost of losing an employee.

  • The cost of hiring a new employee including the advertising, interviewing, screening, and hiring.
  • Cost of onboarding a new person including training and management time.
  • Lost productivity…it may take a new employee 1-2 years to reach the productivity of an existing person.
  • Lost engagement…other employees who see high turnover tend to disengage and lose productivity.
  • Customer service errors, for example, new employees take longer and are often less adept at solving problems.
  • The cost of training.

One reason the real cost of employee turnover is unknown, most companies don’t have systems in place to track exit costs, recruiting, interviewing, hiring, orientation and training, lost productivity, potential customer dissatisfaction, reduced or lost business, admin costs and lost expertise. Departments would need to collaborate with one another to get a true picture of what the cost of losing an employee is.

When thinking about implementing an employee retention program, there are two other types of employee to think about. First, the millennials, then the sales staff.


They are 75 million strong and must be managed in an entirely different way than your older employees. Depending on the study, they were born between 1980 and 2000 to helicopter parents doting on them, guiding their every move since birth. Characteristics of a millennial are:

  • Developed work skills and characteristics from parents that watched their every move
  • Have led very structured lives. Scheduled play dates, organized sports rather than just playing with local friends.
  • In contact with very diverse individuals. They are multi-cultural
  • Millennials are used to working in groups, they want their workplace to be just another place they hang out with friends
  • Millennials believe they can do any task given to them and usually ask for several at a time. Since they’ve been given feedback their entire life from their parents, they expect feedback often in the workplace. They expect it every day.
  •  Although millennials want structure and leadership from their older managers and coworkers, they also want flexibility. They view work as a place to go when they’re not doing other things with friends.

·        Millennials want to know from day one where their career is headed and they want to know what steps they need to take to get there. The old way of climbing the corporate ladder and waiting your turn does not work with them. They have a sense of entitlement and believe they should start at a higher level than those before them.

  • Millennials are the most connected generation to date. They typically will know more about the current technology and social media than your current older employees. They have contacts all over the world through instant messaging, texting, email and all other social media. If not challenged on a regular basis, they will get bored and move on to something that will challenge them more.
  • 70% say that being civically engaged and giving back to society are their highest priorities.

Sales staff

When working with sales staff, you need to find out what motivates them. Motivation and incentives are different. A motivator is typically internal, while the incentive is the external reward. After reviewing several studies, many sales individuals listed the following as motivators:

  • Accomplishment
  • Pat on the back and recognition
  • Being able to close the difficult sale
  • self-satisfaction
  • Peer recognition
  • The chance to enhance the customer's life

Of course, money is the incentive and how they are compensated, but not necessarily the motivator. While having a top sales team is key for an organization's growth, having an unhappy sales member, or losing them to your competition could spell disaster. They are always in direct contact with your clients. Negative comments or actions made by an unhappy salesman could cause irreversible damage to the relationship. On the other hand, if the salesman leaves, he may take that customer and all the knowledge of your company with him to the new customer, resulting in thousands in lost revenue. There is also the cost of searching for and hiring a new salesman and the months it could take for them to get to the level of the person you just lost. Finding out what motivates them is much easier than replacing them.

II      How do top businesses to work for keep their employees happy? Here’s Fortune’s top 10.

  1. Google
  2. SAS
  3. CHG Healthcare Services
  4. Boston Consulting Group
  5. Wegmans Food Markets
  6. NetAPP
  7. Hilcorp Energy Co.
  8. Edward Jones
  9. Ultimate Software
  10. Camden Property Trust

       Perks range from on-site healthcare, cafeterias with free food, flexible work schedules, offering 20% of your workweek dedicated to creative and innovative ideas related to business, paid gym memberships, on-site gyms, massages, and on-site sports complex.

Looking at the top 5


Google’s idea is to take care of each employee in a manner that working at Google ultimately makes them a better person. They remove all barriers so each employee can focus on the things they love, both inside and outside of work. Benefits are an open conversation and change as the employee grows with the company. They offer free legal advice, on-site physicians, discounted legal aid, extra time off when a new baby arrives, along with a little extra spending money.


SAS offers free on-site medical care for employees and families, low-cost high quality child care, fitness center and summer camp for children of employees.

CHG Healthcare Services

Employees of this medical staffing firm compete in talent shows, trivia contests, and activities like a Dress As Your Favorite President competition. Extra paid time off is given to sales teams that meet their goals. New this year: two on-site health centers.

Boston Consulting Group

The elite management consulting firm maintains work-life balance by issuing a "red zone report" to flag when individuals are working too many long weeks. New consultants can delay their start date by six months and receive $10,000 to volunteer at a nonprofit.

Wegman’s Food Market

Turnover is an exceptionally low 3.6% at the Northeastern grocery chain, which lets employees reward one another with gift cards for good service. Many workers like it there so much they bring in relatives. One in five employees are related.

You wonder, How could this pay off. “It pays off spectacularly,” says Milton Moskowitz, journalist and co-author of the Fortune ‘100 Best Companies to Work For’ list. When tracking stock performances of companies on the list, they are consistently outperforming other companies.

Jennifer Mann, vice president of human resources at SAS adds, “Employees matter, and the thought that they just ‘turn off their lights’ when they come to work is ridiculous. You are not going to succeed unless you have a stable workforce.” SAS has a voluntary turnover of just 4% or less in an average industry where 22% turnover is the norm. Jennifer estimates this saves the company hundreds of millions in company turnover.

Daniel A. Wren, author of Evolution of Management thought says that, “the realization that there is a relationship between employee welfare and productivity is actually not new”. Henry Ford tried a workers’ welfare program to deal with high turnover by paying employees $5.00 a day which was unheard of at that time.

The workers of today are smarter, more skilled, and more demanding. They don’t just want more money. Research done by the Great Place to Work Institute shows us that today’s employees want different things. Research of more than ten million employees worldwide revealed what they are looking for.

  • Trust in leadership and each other
  •  Pride in their work
  •  Enjoyment of the people they work with
  •  Fairness and transparency

Can you fix just one thing and make for a better environment? No. Companies need to look at the big picture.

So…in order to give your employees what they want, you have to do what Google, SAS and the other top companies do? That could cost hundreds of thousands of dollars! Not really. The first step in creating a more engaged employee is just sitting down and asking what they want.

After seeing the high cost, lost production and damage to your brand that this brings, doesn’t t make sense to implement an employee retention program?

An employee retention program can start with the interview process. Ask candidates what type of company they most like to work for. What would their ideal company be like? You can also ask current employees what they would like. What would make them feel better? Ask them to anonymously respond regarding what changes they feel need to be made.

A Foundation of strong employee morale is communication. Collaboration, feedback and recognition. Leaders must be flexible, innovative, and think outside the box. Each employee is motivated by different things, so your plan and benefits can’t be one size fits all. You have baby boomers, Sales staff, and millennials all working together. They work in different ways, so different things will make them happy.

  1.  Communication is key. Management can hold quarterly meetings to communicate to the employees the current status of the company. Explain where they stand with regards to sales, to plan, and against last years’ performance. Communicate the plan for the remainder of the year. Talk about the positives within the company. Take a moment to recognize individual accomplishments. Outline the goals and objectives of the company and the overall mission. Employees want to know what they are working towards and how what they do fits into the overall plan.
  2. Sit down with each employee on a quarterly basis. Prior to your meeting, have them fill out a survey highlighting where they excelled and where they feel they need more work. Ask them where they see themselves in the future. Would they like training in certain areas. Each manager should fill out the same form on each employee, then get together and discuss the results. During the review, set goals for the next quarter and put a plan in place for the employee to be able to meet those goals. Make them achievable. Track the progress over the next quarter. Coach along the way.
  3. Implement a recognition program where coworkers and management can recognize employees for going above and beyond their duties. Make sure those employees are aware that someone mentioned they appreciate what they did and list what they did. Recognize it in a company newsletter, or the next company meeting. Everyone wants to feel they matter, and their extra work is appreciated. For sales staff, recognize them for various categories such as sales in a new market, reaching a sales goal, or highest sales margin. Reward them with a personalized achievement plaque or award along with a branded gift. Remember, their motivation is recognition among their peers.
  4. Get the company involved in charitable programs outside of work. Whether it’s blood drives, cancer walks/runs, or Habitat for Humanity, getting employees together working as a team for a good cause shows that you care. You can team employees together that may never have a chance to work together during the normal course of a day. Create a logo and have shirts, backpacks and water bottles made up. Post progress and results on the company internet and Facebook page. This not only makes the employees proud of the company, but clients see this also.
  5. Take care of the millennials by identifying who they are, then working on an individual plan with them. Make sure they get constant feedback and direction. They need to know what each task is and why they are doing it. Where does it fit in the plan for the company. Keep them working on various projects for different departments. They work best in groups so make sure they work in teams. Make sure they have all the tools they need to accomplish the tasks. Give feedback based on the end result and not so much on how they got there. Allow for flexibility without being detrimental to other coworkers.
  6. Give birthdays off. Most employees will take them anyway. Allowing them the day off without using a vacation day or sick day will go a long way toward improving morale.
  7. Implement an overall incentive program utilizing company-branded items. Tailor your program to include reduced absenteeism, volunteer work, and charitable work. Training and peer to peer recognition. You can offer several items as an employee moves on to higher levels of the program. They can range from embroidered apparel to water bottles, stainless tumblers to mobile chargers. This not only gives the employee the incentive to do more, but it helps create brand awareness for the company.



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  • Tags: Employee recognition, employee gifts, employee onboarding, employee morale