In a strengthening job market, your best employees are in increasingly greater demand, and companies are offering more than just a higher salary to attract the cream of the crop. This makes it critical to take immediate steps to help ensure those employees you rely upon will be with your business for the long haul. Providing benefits in the following five areas can help boost the chances of attracting and retaining key employees.
Provide Wealth Accumulation Benefits
With pensions becoming less and less common, the onus of saving for retirement mostly falls on the shoulders of your employees. Providing tools that will allow them to save for their retirement is essential for keeping key employees at your company. After all, if you aren’t providing benefits like a 401k, profit sharing plan or a matching contribution, someone else will.
Beyond your typical qualified plan, you may be interested in establishing a non-qualified retirement plan that allows you to reward specific employees, as these can help your key executives accumulate additional net worth. A deferred compensation plan or a uniquely designed defined benefit plan can work extremely well for some closely held businesses.
Help Protect Their Savings and Income
Providing adequate, high-quality insurance coverage to your employees will help them protect their wealth and provide them greater financial security. Life insurance and long-term disability insurance give your employees’ families financial protection. Income guarantees (based on the claims-paying ability of the issuing company), personal umbrella policies and long-term care insurance allow employees to manage their own personal risks. Keep in mind that sometimes these products can be structured at a lower cost when bought through company-based group programs.
Outline Your Business Continuation Plan
Ideally, you’ll want a plan that addresses three key contingencies: death, disability or retirement. If your key employees hope to one day obtain equity in the business, there should be a clear structure detailing how new ownership in the company will be established. For a family business, for example, you’ll need to decide whether you’d like the ownership structure to be multi-generational or remain within the current generation of ownership.
If your plan is to sell the company, you’ll need to evaluate whether you’d like to perform an outright sale of the business, conduct a sale via private equity or install an earn-out provision if you can’t agree on a price with the buyer. You may also look into selling shares of the firm to your employees via an ESOP (Employee Stock Option Plan).
Provide Wealth Management as a Service
According to the recent “Stress in America” survey sponsored by the American Psychological Association, nearly 75% of Americans reported feeling stressed about money “at least some of the time” and nearly 25% say that they experience “extreme stress” about money. This stress can devolve into a downward spiral with real effects on your business’s bottom line. You can help your employees stress less by providing free personal wealth management services or launching a voluntary financial education program. Either option may help your employees gain clarity and confidence about their financial future.
Promote Work-Life Balance
To avoid sub-par output and frequent absenteeism, consider putting some helpful work-life balance measures in place, such as the ability to telecommute and set more flexible working hours. These benefits demonstrate trust in your employees’ ability to self-manage and can be beneficial so long as they aren’t disruptive to completing certain projects.
Maintaining good health is also a significant part of work-life balance. Wellness incentives such as a “10,000 Steps a Day” campaign can foster community and healthy living at the same time. If your health insurance plan offers gym membership discounts, take care to emphasize this benefit.
Key employees are critical to allowing your business to operate successfully on a day-to-day basis. Doing your due diligence by giving your employees the benefits and support they need can provide lasting value to the stability of your business.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.