Attract, Retain, Protect

Hiring and retaining a quality workforce has become more competitive than ever before. The Great Resignation was a call to action for employers to step up pay, benefits, and reasons for someone wanting to stay with a company for the long haul. Creating a win-win scenario balancing the needs of valued employees while also considering the security and stability of business operations is key. 

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While the Great Resignation focused more on workers at all levels, what is now becoming prominent is the number of executives and managers, CEOs to supervisors, leaving their positions. Why? According to Forbes and a study conducted by Deloitte, an alarming 70% of executives are considering leaving their jobs for workplaces that care more about their wellbeing, which also includes the wellbeing of their families should something happen to them. 

Executive Income Restoration

​A healthcare technology firm with 34 executives, while offering a wide range of employee benefits including health insurance, life, disability, vision, dental and more, was underinsured when it came to income protection and key man replacement of its executives. In an ultra-competitive hiring environment, they needed to rectify the short-fall to bolster their key employees’ compensation packages for retention purposes of executives with higher salaries who are vital to the business operations. A Guaranteed Issue Disability plan was added to the overall Group Disability Plan for these key executives which covered 60% up to $10,000 per month income replacement in addition to the group benefit. For 11 of the executives, as an added bonus benefit, life insurance policies paid by the firm were also included in their compensation package. 

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As an employer, there is a fine balance in providing benefits that attract and retain employees along with making sound investments related to employees that also protect the business should they become disabled or leave. 

7 Considerations in Attracting, Retaining, and Protecting

​While some of these considerations may be familiar to you, others may also be something you haven’t explored:

1. Deferred Compensation: Offering deferred compensation as a bonus or benefit to key employees is often used when a 401(k) is being maxed out by the higher paid team members and an additional way to leverage compensation as a benefit creates added incentive to stay.  Kiplinger’s offers great insight to knowing when it makes sense for your company, sharing that 93% of public companies offer a non-qualified deferred compensation plan to their executives.  As a privately-held business, is it worth it? This article by Truist also offers the pros and cons to consider. 
   
   
2. Executive Bonus Plans: A Section 162 Executive Bonus Plan is a way to attract, retain and reward executives or top earners through life insurance. The employer funds a term or permanent life insurance policy for the employee, who owns the policy, determines his/her beneficiaries, and has control over managing the cash value funds of the policy. The employer covers the cost of the policy through a bonus payout that covers the premiums. 
   
   
3. Life Insurance for Family: Offering a Group Life Insurance benefit to employees can be an added benefit others are not offering. If you work for a company that offers group life insurance, how do you know it is enough and that you shouldn’t supplement it in case something happens to you? This Investopedia article can give you some added insight. 
   
   
4. Key Person Replacement: Do you know how much it will cost you in revenue and operational expense to replace a key employee? What about yourself if you are a business owner? This calculator from Mass Mutual can give you an idea. Key Employee Insurance can be put in place for both protection of your business and as a valued incentive to key leaders and performers in your company to stay onboard. 
   
   
5. Extended Earning Protection Rider: This rider to a long-term disability policy supplements the income of an employee should she/he return to work at a substantially lower income than pre-disability. There are many things to consider related to a disability policy beyond what worker’s compensation may supplement if the cause of the disability is work-related. But what if it isn’t? All the more reason to consider options. This can be purchased as a benefit by employer or by you as an employee as an extra measure of protection. 
   
   
6. Disability & Work Incentive: A Return-to-Work Program through your Worker’s Compensation insurer could be an added protection for getting an employee on leave or disability back to work sooner as well as be an added benefit to the employee in preparing for the unexpected. Key benefits to the employer include retention of experienced workers, reduced turnover, and lower worker’s compensation costs. Key benefits to an employee are financial security, skill retention and positive morale.
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7. Disability & Long-term COVID: Long-term COVID has been classified as a disability under ADA (Americans with Disabilities Act). As a result, as a business, considering how this could affect your workforce and what you should do about it is something now must weigh in your recruiting and retention efforts. 

Now is the time to re-evaluate and consider how you can gain an advantage in attracting and retaining employees, while also putting extra measures in place to protect your business, your livelihood, and your family. 

​For Your Future,

Lori Capozza Zeind
www.lczconsulting.com

P.S. Looking for other insights to attracting and keeping key employees in this unprecedented environment? Check out this blog, New Workforce Paradigm: COVID's Aftermath, by my client and also my strategic business advisor, Sherre' DeMao.