Rethink Retention
For most business owners, success is shared in large part by key employees who have helped build and maintain their enterprise. Vault Financial is built upon the principle that nothing great was built alone, and protecting your key talent is essential to the on-going success of your business.
We believe employee benefit packages have become too standardized across many industries. Vault Financial takes a sophisticated approach focused on retention strategies for your most talented employees. With Vault Financial as a partner, we will rethink your retention strategies through customized bonus initiatives, deferred compensation programs, and selective benefits that can help you drive toward your business transition plan.
Losing key talent from your business can not only impact your year, but it can also have an amplified effect on your ultimate exit from the business. Whether the plan is to pass the business to the next generation, sell to an outside buyer, or transition it to a group of top performers, key employee retention strategies today will help you achieve your long-term business goals tomorrow.
Vault Financial would love to learn more about your business, identify your goals, and help you secure them. Schedule an informational session today to start protecting your tomorrow.
Basic Benefits
Basic employee benefit offerings are designed to build a foundation for rank and file employees. Retirement plans, health insurance, group life and disability insurance may not be designed for retention and often limited proportionally to your highly compensated employees due to contribution limits and benefit caps.
Incentive Plans
Incentive plans based on cash and stock bonuses promote short term performance may not be effective as retention tools. The business entity structure may also make these cumbersome or unavailable. Although effective rewards to incentivize productivity, they may do little to keep your top performers with you once the bonus is paid.
Retention Plans
A retention plan aligns your key employee’s medium and long term goals with those of your business. This creates incentives for your employee to stay or forfeit the plan benefits. Designed thoughtfully, and these can become a great win-win for both ownership and non-equity key people.
Substantial
A retention plan should provide an economic benefit that is substantial to the employee. This will vary some, but we typically target 15-20% of a key employee’s compensation to be tied to longevity or performance.
Deferred
This benefit should not be immediately assessable by the key person. Through vesting schedules, this can be made available not so far in the future to seem unattainable, but long enough to accomplish the retention goal. 10 years is a common starting point.
Recapture
Retention plans should be designed in a way that allows the business to recapture the cost of the plan over time. Properly structured plans are assets on the company’s balance sheet and can reduce long term costs depending on the funding vehicle deployed.
Emotional
Ideally, a strong retention plan will solve a problem for the key employees and their families that is both financial and emotional. The selective nature of these plans allows customization to accomplish this across a variety of individual circumstances.
“The whole is greater than the sum of its parts”
— Aristotle
