‘The great resignation’ – the labor market trend of employees voluntarily leaving their jobs – means employers must get more creative when it comes to retaining talent. Workers are looking for more than just competitive compensation – meaning, confidence and autonomy are all important factors for those considering a change in work environment.
And this isn’t just a passing trend. The author of a summer 2022 McKinsey and Co. report on the reshuffling of the workforce noted, “There’s been a fundamental shift in workers’ mentality, and their willingness to prioritize other things in their life beyond whatever job they hold…”
While not all employee reevaluation can be prevented, many of the reasons for turnover – feeling underappreciated for example – can. To help businesses reduce turnover of the preventable sort, we’ve compiled a list of ideas for celebrating, recognizing and supporting employees – both professionally and personally.
- Split Dollar Life Insurance – In a split dollar life insurance agreement, the employer pays all or part of the premium for the employee’s life insurance, giving the employee a large incentive to stay or risk forfeiting some or all the benefit if they leave. As these arrangements are generally not regulated by the Employee Retirement Income Security Act (ERISA), they can be offered to a few key employees or executives to retain talent. These plans are highly customizable and can be set up so that the employee or the employer owns the insurance plan. Each arrangement has its own tax implications for the business and the employee, so make sure to consult a tax professional before implementing a split dollar arrangement.
- Real Estate Investment Opportunities – Many employees are not aware of or able to invest in commercial real estate on their own since minimum investments are usually around $50K. Since we have several clients who do this, we put together an LLC that Lucrum team members may choose to invest a minimum of $5K in and own a share of the larger real estate play that they ordinarily wouldn’t be able to. Participation in the LLC is tied to their employment at Lucrum so if they leave, the other LLC members have the option to buy the departing person out.
- (Really) Honor Company Holidays – PTO is great and floating holidays can be convenient, but taking company holidays seriously gives employees a true brain break. Make sure that the firm or office is closed on certain days each year so that employees get time off without having to return to an inbox full of emails from colleagues or worry about fire drills interrupting planned time off. At Lucrum, we recognize 10 holidays each year with 9 fixed and one floating. This allows us to all be off at the same time but still accommodate employees’ patriotic, personal, or religious holidays, and still have the office CLOSED for several days as well. As a leader, set the tone and culture by disconnecting from email and communication (as best as possible) during company holidays.
- Adopt A PTO Model (Not Sick vs. Vacation Time) – Ok, so this one might not be as ‘outside-the-box.’ But as a ‘non-traditional’ time off setup that is growing in popularity, we felt it was worth mentioning. In fact, PTO (paid time off) packages are becoming the gold standard for businesses working to build an employee-first culture. At Lucrum, employees have 15 PTO days each year. These can be used for vacation, sick time, jury duty or any way the employee would like. The benefit to the employee is that they don’t have to explain to their employer how they are using the time and, studies show, are overall more likely to use it. It also simplifies tracking time off for HR managers who no longer have to police and assign time off to different ‘buckets’.
- Help With Vacation Costs – Yes. Businesses are not only giving PTO but are also helping to offset the cost of employees’ vacations. For small businesses where the business owner owns vacation properties, they may be willing to offer these properties to employees to rent at no or a reduced cost. Larger businesses are setting the trend of offering cash reimbursement for vacation expenses per year of employment as a benefit. This one is hardly new- some older Charlotteans may be aware that Springs Industries down in Fort Mill had a “resort” in Myrtle Beach and another in Spruce Pine for the mill workers.
- Celebrate Every Employee Anniversary, Starting With Year One – The median employee tenure in the United States is only a little over 4 years. Every employee anniversary should be recognized starting with year one. At Lucrum, we hire a mobile car detailing service twice a year and give our employees a car detail to celebrate employment anniversaries. Employees drive their car to work, have it detailed while they work and drive home with a clean car. This has been well received and is looked forward to each year by our employees.
- Escalating Employment Anniversary Gifts – In light of the 4 year median tenure statistic, it is important to give special recognition to long-tenured employees. In addition to the annual car detail, Lucrum gives employees gifts on their 3, 5, 7 and 10 year anniversaries. Debbi Silva is closing in on her 10 year; hopefully she sticks around a few more years and we have to come up with a 15 year reward! Each year the gift increases in value to match the years of dedication and service. For years like 7 and 10 don’t be afraid to splurge a little. In addition to just genuinely wanting to show appreciation for employees that have stayed with the business, a cost benefit analysis shows it as a worthwhile investment. Employers can spend a little over 30% of an employee’s annual salary to replace them, so a several thousand dollar gift still costs less than what it would have to have replaced the role several times over during their tenure.
- Formally Recognize & Celebrate Birthdays – According to the Harvard Business Review, job search activities jump 12% right before birthdays. Milestones like birthdays are a natural time to reflect on life, career and family. This makes birthdays a particularly powerful employee motivator as their reflection on career can be impacted by the way they are celebrated at work. Not celebrating birthdays is an equally as strong demotivator. Too often, employee birthdays come and go without anyone, or just a few of the employees’ closest co-workers, knowing. At Lucrum, we let employees pick their favorite restaurant and have it catered to the office for a birthday lunch. This formalizes the celebration of the employee by the business.
- Company Owned Season Tickets – Many businesses purchase season tickets for the purposes of entertaining clients and prospects, but surveys show that about 40% of corporate tickets go unused. Allowing employees to sign up for these unused tickets to attend with family and friends is another employee perk. In addition to a sign-up / ‘first come, first serve’ model, tickets can be offered as an incentive for high performers. For relocated employees, it can also be a great way to introduce the new employee to the area.
- Recognize & Help With Personal/Family Life Transitions – Recognizing employees’ responsibilities and life outside of work is a great way to make them feel appreciated as an individual. We knew one business that gave each employee a back-to-school bag filled with age-appropriate supplies based on the age and number of their kids. This saved time and money for busy parents preparing for back-to-school. Of course, the parents still might have needed to purchase school-specific items, but 80% of what they needed was probably covered by the company-provided bag.
We hope these ideas help businesses to make employees feel like a valued part of a team and keep them on board for longer. Have questions about the financial implications of the above benefits for the business or need help performing a cost-benefit analysis for employee retention policies? Feel free to book a complimentary consultation with one of our CFOs.