The team at Scott Belsky's company, Behance, is made up of people he calls "long-term greedy instead of short-term greedy."
They understand that the fast-growing business, which serves as a web platform for creative professionals to showcase their work, often requires its employees to blend their work and personal lives and to think about work beyond normal business hours.
Behance staffers also understand, Belsky says, that it's not the type of company where they can walk into the boss's office to demand a raise, and where pay decisions often come down to paying staff more or hiring more people to manage the company's growth, which currently receives around 50 million page views a month.
"We believe that you should be paying people as much as you can," says Belsky, who co-founded Behance five years ago and serves as CEO. "As a small company, we can have true transparency. Everyone knows what is being made and what is being spent. No one is going to come up and say, 'I want more.'"
Even though the unemployment rate is at a stubborn 9.1%, many companies, aware of the challenges and costs of replacing employees, are dishing out annual raises to keep their best performers. A recent study by human resources consulting firm Mercer found that on average, companies will increase their best employees' salaries by 4.6% this year.
But for small businesses with tight salary budgets, using pay to keep top talent from going to larger rivals is often a losing battle.
"Raises increase your fixed costs, which can be a challenge for smaller companies," says Catherine Hartmann, one of the principals at Mercer who oversaw the study. But "in small businesses in particular, the loss of a top performer has a much more significant impact on the bottom line."
When a company can't throw cash at its best employees, Hartmann suggests, managers should instead lavish their stars with a promising future and have frank conversations with workers about how to keep them motivated and what skills they would like to develop to make them more valuable in the job market.
While making employees more desirable to competitors may seem counterintuitive, there is ample evidence that salary is just one part of the toolkit managers need to retain their best and brightest, says Heidi K. Gardner, a professor of organizational behavior at Harvard Business School who has published case studies examining the effects of pay on retaining employees.
"Pay matters not just because people need a paycheck, but because pay is a point of perceived fairness," she says.
