- Small Business Owners > Employee Retention
Employee Retention Strategies
As a small business grows, the successful owner begins to surround him or herself with employees that they hope are just as passionate about the business as they are. Just like the owner, these employees are critical to the future success of the business.
Initially, salary and perhaps bonuses are all that a small business can afford. As the business is small, employees can easily see how their efforts are tied to business success and how business growth will offer the potential for more compensation. At some point, to retain these employees, non-wage benefits will have to be offered.
Transitions Wealth Strategies guides and educates the small business owner as to what programs are out there. We help the owners understand the cost benefit relationship and help them educate their employees that “a dollar’s worth of non-wage benefits” can be much more valuable to them than a straight salary increase that to a large extent would be personally taxed away.
Traditionally, health and dental based group insurance plans are the first consideration. At Transitions Wealth Strategies, we are licensed to provide and service these plans for companies as small as 3 employees.
However, we also educate business owners that there are other retention strategies that can be applied cost effectively. Following are some excerpts on these....
Group Benefits
As a small business grows, at some point, the small business owner will have to offer group insurance coverage in order to retain their employee base. These plans can be offered for employee groups as small as 3 persons. Normally, group insurance plans will include coverage for life insurance, accidental death and dismemberment, long term disability, dental care, healthcare, prescription drugs and vision care. Premiums paid by the Company are often controlled by using a combination of deductibles and co-insurance and employee cost sharing. More Info..
Health and Welfare Trusts
A Health and Welfare Trust (HWT), also known as a Personal Health Spending Plan (PHSP), provides an alternative method for small business owners to provide a health care expenses benefit plan. The HWT can be implemented as an all encompassing health care services plan, usually as a more affordable alternative to a group insurance plan, or it can be set up as a “top up” plan for the owner, dependent family members and key employees, over and above an existing base group insurance plan. More Info..
Group RRSP
Small businesses are rarely able to compete with larger companies when it comes to employee benefits. When it comes to assisting employees with their retirement savings plans, registered pension plans are out of the question for small employee groups. However, one benefit that the small business owner can employ easily is a Group RRSP. Having such a plan will give employees the satisfaction that they have an opportunity to look after their future which is an area of increasing employee concern. More Info..
Critical Illness Insurance
Small business owners can utilize company owned critical illness insurance to strengthen a key employee’s ties to the Company. Critical illness insurance typically covers the occurrence of cancer, heart attack and stroke. Optionally, additional illnesses can be covered. Critical illness insurance pays out a lump sum dollar amount if the insured contracts the covered illnesses and survives. More Info..
Life Insurance
Small business owners can utilize life insurance to strengthen a key employee’s ties to the Company. More Info..
Retirement Compensation Arrangement
A Retirement Compensation Arrangement (RCA) allows a Company to make tax deductible contributions on behalf of owners and key employees for the purposes of supplemental retirement income. A RCA is ideally suited for high income earners who wish to sustain their standard of living into retirement. It is ideal for business owners, executives and professionals with professional corporations. More Info..
Individual Pension Plan
An IPP (Individual Pension Plan) is a personal defined benefit pension plan. Think of an IPP as a "supercharged RRSP". Contributions to an IPP can be up to 65% greater than an RRSP thereby creating a much more powerful tax deferred savings plan for retirement. Funding the plan is fully tax deductible to the business. Funding will include actuarially determined annual contributions and in most cases a substantial contribution for past service. An IPP is ideally suited for high income earners who wish to sustain their standard of living into retirement. It is ideal for incorporated business owners, key executives and professionals with professional corporations. More Info..
Workshops & Seminars
Demonstrating that ownership cares for their employees, their welfare and their concerns, repeatedly ranks higher than compensation when it comes to employee retention. Genuine interest in their well being goes a long way. More Info..
