4 Ways to Stop Top Talent From Leaving (and Leaving You Scrambling)Business owners everywhere are worried about keeping key employees — and keeping them happy. These four ideas can help.
Imagine this scenario: You're a few years away from selling your business, or deep into a five-year growth plan. Out of the blue, your right-hand office manager quits. Overnight, your best-laid plans fall into disarray.
Replacing that manager entails direct costs — hiring and onboarding someone new. But the indirect costs can be even more disruptive and harder to quantify: knowledge gaps for existing employees, reassigning the work, even temporarily, to name just a few.
Key efforts to reward and retain valuable employees (and help them figure out their retirement) can help you both keep people and keep them happy long-term.
1. Retain: Personalize valuable employees' career paths and goals.
Labor has been incredibly mobile in the last few years, as employees have changed jobs or career paths in search of better pay, benefits, and growth opportunities. Businesses must make important employees feel valued: That's the key to recruitment and retention, according to a Principal®survey.1Employees rank feeling valued as the no. 2 reason that they want to work somewhere and stay loyal. That recognition equals more engaged employees likelier to see a career path with your company.
You can help shape the direction of a person's career so they can make progress. While there are long-term options for employees to advance — building skill sets, assuming leadership roles, for example — business owners can get creative with growth, such as boosting autonomy and building in both accountability and high expectations.
2. Reward: Get inventive with compensation.
The more you rely on a subset of key employees critical to the business's success, the more you must motivate them. Special savings plans and other benefits can cultivate loyalty and a sense of ownership among your core business talent and leadership. It gives high performers more incentives, keeps them focused on key goals, and helps them see how they contribute to business growth.
That includes emphasizing outcome over input, value over volume of work, and contributions to holistic business goals. Ongoing conversations can help outline what that looks like for each person, from cash bonuses to additional time off, to name just two.
3. Retire: Help them save more for post-work years.
你和你的有价值的员工可能希望boost retirement savings, but yearly income and contribution limits often make that challenging. A non-qualified benefit plan is one idea to add to post-work retirement funds and, based on the payout schedule, retain people, too. In a nutshell, non-qualified plans are a tax-deferred, employee-sponsored way to help key employees save more for retirement. A non-qualified compensation plan is often linked to a required service period or a specific date following a sale.
As you brainstorm what works for you and your employees, know that you can chart growth and retention plans simultaneously with career paths. It's OK to start small. Find a financial professional who can help you choose the compensation ideas you can afford and set goals for what you want to do in the future.
4. Reward: Sell employees the business if they want it.
One of the most direct ways to help employees own their work (and cement their value to the company) is to sell them the business. Bob's Red Mill, a Principal client, is 100% employee-owned; a committee of more than 40 employees, representing all shifts and departments, helps oversee the ownership plan. Management there found that employee-owners are a lot more dedicated not only to their career aspirations but to the company.
ESOPs, or employee stock ownership programs, can work in all sorts of ways. The end goal, however, can help to build both short-term and long-term financial security for employees — and retain those key people so you might be able to worry less.
Get timely ideas from businesses like yours atprincipal.com/benefits.
1128 business clients polled in May 2022
The subject matter in this communication is educational only and provided with the understanding that Principal® is not rendering legal, accounting, investment or tax advice. You should consult with appropriate counsel, financial professionals, and other advisors on all matters pertaining to legal, tax, investment or accounting obligations and requirements.
Bob's Red Mill is not an affiliate of any company of the Principal Financial Group®. Bob's Red Mill and their employee's viewpoints may not be representative of other clients' experiences.
Insurance products issued by Principal National Life Insurance Co (except in NY) and Principal Life Insurance Company®. Plan administrative services offered by Principal Life. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc. Securities offered through Principal Securities, Inc., member SIPC and/or independent broker/dealers. Referenced companies are members of the Principal Financial Group®, Des Moines, IA 50392.
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