{"id":3333,"date":"2016-08-16T07:22:13","date_gmt":"2016-08-15T23:22:13","guid":{"rendered":"https:\/\/zegal.com\/?p=3333"},"modified":"2024-12-27T18:00:15","modified_gmt":"2024-12-27T10:00:15","slug":"5-ways-incentivise-employees-without-burning-hole-pocket","status":"publish","type":"post","link":"https:\/\/zegal.com\/en-sg\/blog\/post\/5-ways-incentivise-employees-without-burning-hole-pocket\/","title":{"rendered":"5 Ways to Incentivise Employees Without Burning a Hole In Your Pocket"},"content":{"rendered":"

Small and medium-sized businesses are pitted against the likes of large multinationals in the battle for talent on a daily basis. Indeed, from salary budgets to fancy offices, it appears small businesses are on the losing end when it comes to attracting top talent.<\/p>\n

That\u2019s not to say small businesses should concede defeat!<\/p>\n

According to the World\u2019s Most Attractive Employers report for 2016 by Universum, today\u2019s employees look beyond salary and monetary benefits when it comes to deciding if a particular job is aligned with his\/her career goals and work style:<\/p>\n

\"Universum<\/a><\/p>\n

Source: World\u2019s Most Attractive Employers, Universum (2016)<\/span><\/em><\/p>\n

This means that there are opportunities for small businesses to be creative with offering employee benefits, without having to burn a huge hole in the balance sheet. The following are some popular ways:<\/p>\n

<\/span>1) Offer Employees Share Options<\/strong><\/span><\/h3>\n

Your earliest team members take on a huge risk when they decide to work for you \u2013 they might have given up on alternative job opportunities and\/or taken a significant pay cut, and joined your company at a stage where there was perhaps no traction, revenue, or in some cases, a validated product. Most of them do so in exchange for a share in your entrepreneurial dream, and it is not uncommon for founders to reward employees<\/a> with shares by way of Options.<\/p>\n

Employees are often offered this \u201csweat equity\u201d in the form of an Option to Purchase Shares<\/a><\/span>. First, you will need to put an Employee Stock Option Plan (ESOP) in place (also known as a Share Option Plan<\/a><\/span>). The ESOP sets out qualifying criteria for employees to receive the option, which is comparable to a bonus scheme, when they can \u201cexercise\u201d the option, and what happens if they leave their employment.<\/p>\n

With the ESOP in place, you can then have a discretion to give your employees to an Option to Purchase Shares in your company at a set price with an expiry date of, say, 1 October 2017. This means that, at any time before 1 October 2017, the employee can pay the company the offered price and require that the company issue him shares. In other words, the employee effectively buys the shares at a discount, making the Option to Purchase Shares akin to a bonus.<\/p>\n

Read more:<\/strong>
\nKey clauses to watch out for in your ESOP<\/a>
\n<\/p>\n

<\/span>2) Be better than minimum requirements under the Employment Act<\/strong><\/span><\/h3>\n

Most employment laws mandate that employers must provide the following types of leave to eligible employees:<\/p>\n