One important issue an owner can spend their time on, is getting the right people to fill the right positions in their company, while removing the wrong people from positions.
Situations are always changing and can change the dynamics of the business. For example; the retirement of a key owner or other key employee, the unexpected loss of a key person due to death or disability can pose a significant financial hit to any company. Planning can reduce the adverse impact.
Continuity of leadership is important. Having a backup for the key positions would be ideal. Sometimes you don’t have the personnel to accomplish this. A company training program can be a valuable tool for the long-term growth of the company. Cross training is worth the time. Having personnel filling in for important jobs when needed is a valuable element for the business growth.
Trader Joe ‘s is a very good company and a great example of a company with interchangeable job descriptions. Employees learn multiple jobs and task. They rotate their jobs every few hours on the employee’s shift. They create teams, with captains and the team helps with on the job training for the e different jobs. Their education is ongoing. Trader Joe’s has a bench ready to go. This is also done with their management team. Their candidates are always being educated to move up the line and into the position.
Board of Directors
Having an active Board of Directors can help with guidance in implementing employee growth. This is next level management. This is a value driver which is of importance to the growth and value of the company. It is what a potential purchaser looks for in a company that they may be interesting in purchasing.
The board helps provide management continuity and immediate oversight in triggering events, such as divorce, death, disability, or withdrawal. The board can be made up of key insiders and some outsiders who have insight to your business, but not necessarily in your business or industry.
An Advisory Board, does not have management responsibility. The people who are part of the advisory board are not part of the Board of Directors, nor do they have any responsibility or potential liability. The Advisory Board can be tailored to help you address business concerns, such as strategic planning, sourcing, business acquisition, cost containment, distribution network, customer engagement, employee engagement brand management and product/service development.
Why You need key employee retention plans
Chances are that, there are recruiters who are aware of talent working within your industry. There is also a very good chance that your key people stay in touch with industry recruiters to stay abreast of the opportunities within the industry they know the best. Because of this you would be wise to review with your key people the things that make them happy working in your company and try to implement those types of benefits which will enhance their working experience.
Some of those areas could be (listed is not limited to)
- Deferred compensation
- Sick pay
- More vacation time
- Retirement plans
- Death Benefits
- Vested non qualified retirement
These are just a few of the benefits that give real value to the employee and make it harder for your competition to sway them away.
As an example; A few years ago I installed an executive compensation package for a group of managers a few years ago. As part of the plan, we designed the plan with a vesting schedule. Even if the key employee were enticed to leave by the competition, they would have to leave a substantial amount of money on the table, thus increasing the odds that the employee would not leave. In this case, even if the employee left, the employer would be reimbursed a good part of the plan assets.