In a tight labor market, what strategies beyond your health care and retirement plans can help companies retain their most critical employees? B&E President Sarah Kaelberer offers creative compensation strategies to recognize and retain a lasting relationship with key employees — with your best interest in mind.
You’ve said it for years. You don’t know what would happen to your business if one or two key employees decided to leave. Perhaps you think you’ve done everything you can. You’ve taken care of the basics: competitive salary; safe and healthy work environment; health insurance and Health Savings Account. As a small business owner, what more can you do?
A lot actually.
I’m Sarah Kaelberer, President of Business & Estate Advisers. We advise small business owners on strategies to protect their business, including retaining employees who are critical to your success.
In a tight labor market, NOW is the time to have proactive conversations about strategies to retain your most critical employees — BEFORE they are lured away. As small businesses we often think we can’t compete with the big companies that offer stock options, fancy retirement plans or executive bonus programs. But we can!
Employees are concerned about things beyond a paycheck. As a small business, you are in an agile position to design individual compensation strategies for your critical employees. There are a number of customized benefit options to explore. The employee retention package may include deferred compensation, phantom stock, profit sharing or even equity ownership, to name a few.
We have created executive compensation plans custom-designed around what’s important to the employee. For companies of less than 25 people, there aren’t usually duplicate jobs; therefore, what is done for one employee does not have to be replicated for others. It can be, but it does not have to be.
For one client we designed an individual executive benefit to grow a pot of money that is distributed at retirement. But what mattered here is that it also allows the employee to draw on that fund – say up to 10 percent – for education, elder care, or travel. It all depends on what is important enough to that individual to incent them to stay with you — these “golden handcuffs” can provide owners some peace of mind. We have tremendous flexibility here and can base deposits on profit, performance, or just about any metric you want. It’s all about planning for and protecting the long-term viability of your business by retaining your key critical employee.
My point is: The only way a company can continue to be successful is if it continues to invest in its most valuable resource — the human resource!
Take action now to retain your critical folks to and prevent them from being poached. Know that:
- Just because you are not hearing about potentially losing an employee, doesn’t mean those conversations aren’t happening.
- You can take care of one or two key personnel without adjusting compensation for all.
- You don’t have to spend a lot of money to invest in their long-term loyalty and commitment to your business.
One of the biggest challenges our business clients have is hiring and retaining good people. And those that have them, whether they admit it or not, if they are not actively working to retain them, they are at risk of losing those good people!
With your interest in mind, we at B&E strive to help give you peace of mind knowing your business’ essential key employee(s) are engaged for the long-haul.