Jon Sutcliffe, Partner at Kingston Smith, believes that keeping and incentivising key staff may not be as difficult as you think!
Good staff, like good clients, usually have their pick of employers, so thinking of ways to recruit, retain and incentivise them is vital. In a people business particularly, the quality of employees can have more of an impact on the bottom line than anything else. For start-ups though, encouraging high calibre employees to join an up-and-coming business can be just as hard as it is to retain them.
Whether it comes to attracting staff, keeping hold of employees and motivating them, employers should look at the value of what they offer as a whole, not just the money on the payslip. Offering the right type of incentive to the right employee is crucial to get maximum value from it. You need to get the right fit for the organisation too. You might consider asking your employees what motivated them to come to you in the first place, what motivated them to leave their last job, what they think competitors have to offer that you don’t, and what they’d like to see in the future. You may discover something you’d not thought of before. For instance, money doesn’t generally rank particularly high when it comes to why people come to work, but it does motivate them to leave. Instead, you may need to look at the working environment and whether it’s somewhere people want to go everyday or if it’s a pressurised place where taking time off to go to the doctors is frowned upon.
Employers also need to think about what they’re trying to achieve and what’s driving it. Are they wanting to provide an incentive to work towards a common goal, or are they looking to lock in key people whose skills your business depends on? That then helps to target the incentive to the employee. Business owners can do this by splitting staff in the following categories: “Superstars”, the “Core Team”, “Nomads”, and “Transfer List” employees, and then apply the incentive to each group.
- Simple bonuses are for your Core Team and maybe some of the Transfer List, and can be linked to individual or team performance. Weighting can be applied according to levels of salary, service and sickness. Non-cash rewards, such as medical and life insurance, season ticket loans, ride to work schemes, extra time off, or memberships can also be considered. The key is to ask your employees what they value though, as opposed to what you think they value. Whatever you choose, simple is best.
- Profit sharing schemes and performance related bonuses should be given to Nomads; top contributors who are not wedded to the company but enjoy working towards a target. The scheme can be discretionary or linked to team or individual performance. If it’s going to be generous, consider structuring it so that it serves as an incentive to stay with company; for example, pay the bonus in instalments which are dependent on remaining with you.
- Share incentive schemes are for your Superstars, those marquee players you want to lock in. There are many routes to consider though, and some not as straightforward as they once were. We now have approved and unapproved share options, phantom share schemes, ESOPS, SIPS, EMI, founder shares, and shares in partnerships and limited liability partnerships. In simple terms, they fall into those approved by the Revenue and those which are not. But don’t think that unapproved schemes are illegal or the Revenue dislikes them; it just means they don’t meet certain criteria for specific tax reliefs.
Incentivising key members of the organisation is something that no business owner can afford to ignore. If you choose the right way of doing so it can be a great way of retaining and motivating staff, improving productivity and performance, leading to the overall success of the business.
Thank you Jon.
To find out more about Kingston Smith visit their website at www.ks.co.uk.
Alternatively, to find out more about available office property in the Silicon Roundabout area contact Kushner at www.kushnerproperty.com