Keep Employees on Board with Tenure Awards

Perhaps your business is currently in no position to offer stock options, elder care or other high-end fringe benefits provided by much larger firms. If that's the case, stick to the basics -- cash and vacation time.

One of the most effective ways to retain long-term employees is to reward them with things that matter the most to them. Surveys show that both perks rate high on employee wish lists, particularly at companies that hire a lot of skilled and semi-skilled laborers.

Consider setting milestones that deserve recognition -- like five, ten and fifteen years with the company -- and giving out awards like these:

1. Cash: Everyone appreciates and can use extra money. Consider establishing reasonable tenure awards - say, $2,000 for five years, $4,000 for 10 years, $6,000 for 15 years, and so on. The rewards should be affordable for your company, but not so low that they provoke shrugs from staff members.
2. Vacation: How about an additional week's paid vacation for every five years with the company? (The public sector has been offering this benefit for years with great results.) Some companies offer plane trips or sea cruises to long-time employees. For instance, five years nets a weekend at a nearby resort, ten years yields a family trip to a sunny climate, and 15 years earns a week vacation abroad.

These perks shouldn't replace competitive wages or opportunities for advancement. But they do demonstrate clearly that you value loyalty and longevity. What's more, if you can build tenure awards into your overall benefits package, you might end up with some tax advantages. Check with your benefits administrator and your tax pro.