Retaining Top Talent Tip #2: Let Employees Share in the Business’ Success
August 21, 2020
It is well established that employees who feel they have a stake in the business are more likely to stay. In addition, giving employees the opportunity to share in the company’s long-term success can make it financially more difficult for them to leave. Here are some aspects of long-term incentives that all employers should consider:
- An opportunity to give employees something of value in tough times. When cash is limited, giving employees the ability to share in the company’s long-term profitability allows companies to incentivize employees while ensuring that payments will only become due based on the company’s success.
- Give employees a financial benefit for their commitment and contribution. Employees who have something to gain from the company’s success are more likely to work hard for it. Knowing that they stand to benefit financially from the business’ success should be a strong motivator for employees to innovate and outperform the competition.
- Tangible incentives to stay. Another benefit of giving employees a share of the company’s long-term success is that it provides employees with a clear financial incentive to stay (and disincentive to leave). Knowing that there is a significant payout around the corner may just be enough to keep an employee from looking in the first place.
- There are many ways to allow employees to share in the company’s success. Companies often think that the only way to give employees a share in the business’ success is to give them equity – but that’s just one option. Phantom equity plans, profit-sharing plans, and other long-term incentives tied to profitability or accomplishment of stated goals all serve to give employees an interest in the business without giving them a say in how the business is run.
If you haven’t recently considered these types of programs – or you haven’t recently revisited them – it is worth your while to talk with your employment and business attorneys and see if there’s more you can do in this area to hold on to your top talent.