With the unemployment rate sitting at under four percent I've experienced a growing number of small business owners expressing concern over how to attract, motivate, and retain talent. It's an employee's market out there now so there's reason for concern but, if they do it right, small business owners can compete for talent better than ever before. To gain the confidence and results necessary to run profitable organizations, all employers must first recognize that old incentive and bonus programs alone will no longer offer effective results. It's not just about the money anymore.

Good news for small business owners.

This is actually positive news for business owners, especially when hiring employees under the age of 40. Millennial and Gen Z workers are more intrinsically motivated to find reward in their work, and that may or may not include monetary reward programs. In past years, micro businesses could not come close to competing for talent against larger companies that are able to offer generous benefits packages. Given what employees are most interested in today, the playing field is more level than it's ever been.

According to this 2016 study, 84% of U.S. based organizations now use non-cash, socially meaningful ways to reward employees. A total rewards strategy still offers cash rewards and bonuses, but they constitute only a portion of the benefits package, with less tangible rewards making up the balance. This is where small business owners can get creative, finding ways to better engage employees with a culture that supports their professional and personal goals.

In a 2018 study conducted by the Harvard Business School with over 92,000 job ads through Appcast, the more benefits an employer described in their job ads, the higher the application rates. And, the employers who described benefits that included life balance perks, like family-related leave, were perceived to care more about their employees. This is the culture that most applicants are attracted to today.

Here's an example:

Data generated by firms such as Appcast and Glassdoor further illustrates that adding intangible rewards like travel, personal and professional development opportunities, flex time, community involvement, and strong and inclusive leadership can help you to compete in the employee market place. Many of these perks can be offered in an affordable manner. One of my clients mandates that her employees participate in live and virtual educational programs each month. Most are free or come at a very low cost. Her metrics have revealed that revenue and customer satisfaction ratings increase when her team regularly engages in these programs, in addition to attending weekly staff meetings. During third quarter last year these things fell off the radar and my client experienced an 18 percent drop in revenues. Her employees simply lost their motivation to perform. Once participation was restored, and weekly meetings resumed, the business recovered the 18 percent and increased revenues by an added ten percent.

Employee recognition is powerful, and it's free.

In other good news for small business owners, verbal recognition goes a long way for today's employees. Only 17 percent of employees believe their managers understand how they want and need to be recognized. If you want your employees to feel valued, recognition is important. Again, this can cost little to nothing.

Today's workers like to be recognized publicly, but they also appreciate a personal note from their boss. Yet another client of mine once expressed that she did not want to praise her employees because they were simply doing the job they were hired to do, so why applaud them for it? We changed her perspective by starting out with a few small experiments, one being a hand-written note of thanks when an employee reached a target or excelled in some other way. Not only did morale and productivity improve, but my client actually enjoyed experiencing the appreciation she received in return.

A total rewards strategy can include steps that create a more inclusive culture that offers your employees more ownership, autonomy, and room for creativity. When an employee is at least partially responsible for the development of an idea or process they are more likely to exceed your expectations. When a job applicant knows that these intrinsic rewards are built into your culture you have a fighting chance of winning their approval.

What about medical benefits?

Finally, let's address the elephant in the room: medical benefits. Small business owners tend to believe that since they cannot afford these benefits, they also cannot afford the employees who rely on them. This is not always the case. I've experienced many instances when small business owners offer a small monthly stipend earmarked for insurance premiums. Many applicants are willing to walk away from more robust medical benefits packages if they have a little help to offset the expense, especially those who do not have children. Speak to your accountant to see if there is a specific way that your state requires you to set up this benefit.

What's your belief about attracting great employees?

Most importantly, think about your beliefs in terms of whether or not you can afford great talent, or even good low-wage workers. If you believe you cannot compete, then you won't. See your company as worthy, and as a rewarding place to work. Only then will job applicants view it that way as well.