How to retain key employees? (It’s not always about money)

Every employee is a key employee. As a benefits professional you are always seeking new business. This often means getting a business that is someone else’s key client to become your key client. You are not alone. You have a team or office supporting you. Competitors are doing their best to persuade some of your key employees to become their key employees. How can you create an environment when they hang up the phone on those calls from competitors?

Strategy #1: Pay more money

It’s often assumed people move because someone else offered them more money. The knee-jerk reaction is to offer your team member more money to stay. You tell them how they are an integral part of the team. They wonder, “If I’m so important, why didn’t you offer me more money before?” Meanwhile, industry publications conduct surveys and run articles listing average salaries for different job descriptions in metro areas. This strategy can work, but there are alternatives.

You’ve heard the expression “golden handcuffs.”  If your firm also advises on compensation plans, this may be an area where you have firsthand experience. Many firms award annual bonuses based on how well the firm, office and employee performed during the previous year. The major benefit is the one-off nature of the payment. Unlike salary increases, the increase doesn’t become a built-in annual expense. The “golden handcuffs” enter the picture when the award involves stock options, restricted stock and vesting. This drives up the cost for the competitor seeking to hire them away because the key employee is leaving money on the table if they make a move.

RELATED:  4 leadership tips to prevent good employees from leaving

Strategy #2: But remember, money is not the only motivator

Many factors contribute to our financial comfort level. Are you a one- or a two-income family? Do you have children in college? Are you in an area with a high cost of living? What is your overhead? Put another way, although everyone wants money, more is less of a motivator to some people.

A financial advisor in New York has always impressed me because she has little or no staff turnover. I think in 25 years she has only had three assistants. She explained the importance of taking time to learn what’s important to people instead of assuming the solution is always “pay more money.” Here are some things that could be important to your key employees:

• Continuing education. The key employee might be taking college courses in their spare time. Perhaps they are working towards an advanced degree. Paying part or all of the tuition costs and allowing flexible hours for studying at exam time can make a difference.
• Instilling company values in others. Some key employees are proud of their firm and enjoy training new hires in the values and culture along with how to do the job efficiently. They are thankful for their career and want to instill the same value in others. They can be very happy running the office orientation and training program.
• Industry recognition. Some prize their professionalism. They join the industry trade group, run the local chapter and want to attend the regional and national conference. They see themselves as representing the firm. They can be very loyal if you absorb their membership dues and the cost to attend conferences. You give them time to attend meetings and perform their association responsibilities.  You showcase them in office meetings, asking them to report on conferences.

In these cases you have identified something more important than money. Often, it’s an activity. You have supported and sponsored their interest.

Strategy #3: Care for them as individuals

We have friends in Asia.  We hear stories about a bottomless labor pool. If someone leaves, their post can be filled instantly. We have heard some of those businesses do not fire employees because that would trigger compensation expenses. They make the work environment so unpleasant the employee quits. When people are considered anonymous and easily replaceable, loyalty goes out the window.

Let us suppose you are a star performer in the benefits business. You have one or more people providing support.  Your team members are convinced you are going places. You might be promoted into management or leave to work for a competitor. They are emotionally invested in your success. They worry what will happen to them if you leave.

The first step in building loyalty is to show them they have a career, not simply a job. There should be a path of advancement. Associates in law firms strive to become partners. If your unlicensed assistant gets their certifications, they are moving from an administrative into a professional role. They get more respect. You might have a path for administrative employees to join the sales force, giving them higher earning potential.

Another strategy to develop loyalty is shared goals. When you do more business, they make more money.  This would be spelled out by the numbers for every quarter. If you exceed your target, they make more. Now everyone is rowing in the same direction. They understand your business and know your clients. If they were hired away, that advantage disappears.

Returning to the “what happens next” scenario, a good assistant needs to know they will have the opportunity to follow you up the ladder if you ascend in management. Put another way, you will bring them with you. This is common practice in large companies. Managers often bring their own people with them because they are reliable and known quantities.

If you are sharing your success, give people a career path and explain loyalty works both ways. You should have a committed team.

Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book, “Captivating the Wealthy Investor” is available on Amazon.