When workers need a raise and you can't afford it

NEW YORK - Many small business owners are finding themselves in painful conversations with employees these days, chats that start with "Boss, I'm really strapped for cash - I need a raise." But many companies are themselves hurting, and an owner may need to look for a way to help a staffer that doesn't involve money.

Human resources professionals say that by being creative, owners can give employees something of value, even if it's not a bigger paycheck. Just saying "no" and leaving it at that is probably a bad idea if this is an employee you want to hold on to.

Beverly Kaye, an employee retention consultant in Sherman Oaks, Calif, suggests owners be truthful, acknowledge staffers' problems and also let them know they're valued.

She recommends telling an employee seeking a raise, "You deserve it, but I just can't do it right now. Tell me what else would work - what would make your life easier, what would make things better for you?"

Kaye recommends then brainstorming with the employee to come up with three or four perks or benefits that would make the employee feel better. For example, a couple more vacation days, or a later arrival or early departure on Fridays in the summertime.

She's dealing with the situation at her own business; one of Kaye's staffers has a daughter about to go off to school, and the employee was hoping for a raise to help pay for tuition. Kaye ended up hiring the young woman to be her house and dog sitter - and paying her the money that would have gone to a kennel during Kaye's vacation.