Forums: Discussions for entrepreneurs and small business.

Hi, we are a small IT consulting company that relies heavily on a workforce, other than myself, that tends to be in college (they work 25+ hours). These guys are eager and ready to learn. If you can deal with them being missing for several hours each week, it works great.

That said, I want to provide additional money to them without tying myself to potentially high salaries that could hurt us when business turns slow now and then.

I`d like to get your thoughts on my strategy.

First, are bonuses just a bad idea? Are higher salaries the way to go?

Right now I give bonuses for writing articles, presentations, referrals, after-hours work, a $1000 yearly educational allowance, and 15% of their work-week for self-directed study (paid).

My goal is to have a company that can pay market rates for our salary, and help our employees with other benefits. Once we grow larger I`d like to pay above-market salaries. (Again, maybe a bad idea. Perhaps I should dump bonuses and fringe benefits and just bump up salaries a bit now?)

So, we are doing well. Right now we have two junior-level consultants. One tends to work on more overhead/internal work (not billable) and the other we bill out for a high percentage of his hours.

If I want to pay a bonus, how would I go about it? Quarterly, yearly, per-project? Should I base the bonus on an objective "hours work" basis, or on a subjective "your overall impact on me and the business". The fact that one guy does a lot of overhead work makes it hard to do a bonus based on effect-on-profits in my mind. Thoughts? I`d love to hear them!

I am a Sr member of a "high-end Project based development firm" in NYC.  Bonuses are great because it adds to the total package but, I have seen success with hirer bases and a 5-10% bonus will keep employees with the firm. Turnover/ retraining of staff is a very expensive endeavor.  Make sure there is no “boring time’ and fun place to work. 

 

What type of IT consulting do you do?

 

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Thanks for the note!

We do Linux interoperability, Identity Management, and LDAP directory services.

One of my guys is pretty well trained at this point (to the point of being able to step in for me), so he`s definately a keeper. I just gave him a raise after his probationary period, but am thinking about bumping that amount up.