Bonus programs in the Firearms Industry
Over the past year, the firearm industry has experienced exponential growth. The growth in the past twelve months has been observable in the record number of gun sales across the country, as indicated by an unprecedented number of background checks in the National Instant Criminal Background Check System (NICS). The 2020 calendar year saw close to 40 million background checks being conducted on the NICS. This is the largest number of background checks ever conducted for a single year since the FBI began tracking the number of background checks on the NICS.
However, increased activity in the firearm industry has also meant that the employees in the now-busier firearm retailers and shooting ranges have grown more occupied. A sharp increase in the number of customers has put a strain on employees in the firearm industry as they seek to keep up with the needs of customers.
To promote productivity by the employees and to keep them motivated, employers in the firearm industry should consider creating bonus programs for their employees. Some employers have already begun doing this.
I have had many requests by different players in the firearm industry to help them develop bonus programs for their employees. Guiding employers through the process of developing bonus programs for their employees demands expertise and careful consideration of the unique needs of each employer. Nonetheless, there are some characteristics that define the firearm industry as a whole when it comes to the development of a bonus program.
Business owners in the firearm industry have to take into account some unique considerations when developing bonus programs for their employees.
To begin with, a business owner should consider that not all sales in a firearm retail store are equal in profit margins. For instance, firearms have a markup of somewhere between 5 and 10% whereas firearm accessories can have markups as high as 40%. Therefore, if as a business owner you were to give a 10% bonus on all sales, and an employee proceeds to only make firearm sales, then you could be stuck with inadequate profit to replenish your stock. The bonus program must therefore be tailored to fit the varying markup situation of inventory items. At the same time, having too complex an employee bonus program will only frustrate your employees.
To develop an ideal employee bonus program, business owners in the firearm industry should adhere to the following guidelines:
Make it Simple – Any bonus plan should be easy to understand and follow for employees. The bonus program should also be easy to implement for managers. Any plan that employees find hard to understand will do nothing but frustrate them, which is by all means counterproductive. A bonus program that is hard for managers to implement is also a headache that would likely fail to achieve its intended goals.
Make it Equitable – Your bonus program needs fair to all employees within the business. If one department receives a better bonus than others then this can cause discontent among fellow employees. Teamwork among all departments makes for a productive and profitable company.
Make it Timely – If you promise a bonus to an employee to be paid at the end of each month, quarter or year, make sure they are not delayed or even worse, not delivered! Nothing demotivates an employee more than failing to receive what they were promised and have worked for to receive.
Make it Relevant – Employees need to know why the bonus program is structured the way it is. For instance, there is no reason why employees should not know that the fact that the profit margin on firearm accessories is higher than that on firearms is the reason why the bonus program is structured to feature different bonus rates for sales of firearms and those of firearm accessories.
Make it Significant – Not all bonuses need to be cash-based. For example, you can give gift cards to grocery stores during the holidays. Sometimes these non-cash bonuses have more significance to employees than cash bonuses.
Overall, as a business owner, whatever bonus you pick for your employees, you should make sure they are legal and well-documented. Proper documentation should indicate the magnitude of the bonus and exactly how and when employees receive the bonuses. Business owners should recognize that they can get into legal hot water due to wage and hour claims related to the disputed bonus program. Therefore, careful design and implementation of an employee bonus program are needed. This is one of the areas that EmployerESource excels in.
You can contact EmployerESource for help in developing your legal and productive employee bonus program now.
Also, watch for our next article on the different types of bonus programs available.