Employee retention is one of the most important strategic initiatives of any business, and you can start by keeping employees happy. However, creating this kind of climate requires a great deal of attention, including: creating a family-like culture, providing a good working environment, holding leadership accountable and empowering employees. It also requires great employees who feel valued, appreciated and well equipped for success. That all takes time and effort, and there are no shortcuts.
To achieve this, a business may take various steps, including extending employee benefits, promotions and flexible work arrangements. Often, these steps can include time off, health benefits or even generous retirement plans, but it can be beneficial to take a unique approach to employee retention by offering a lifetime employee-retention credit.
What is a lifetime employee-retention credit?
The term “lifetime employee-retention credit” was first used in Canada in 2002 to describe the ability of employers to award their employees a payment or lump-sum payment to compensate them for up to 60% of their salary, per year, over the next five years. In 2003, the Ontario Ministry of Labor published a discussion paper on this concept.
This means that an employee who has worked for an employer for at least five years is eligible to receive an employee-retention bonus in lieu of annual employee-retention bonus payments for up to four years. The bonus would not be considered an employment benefit in the determination of termination pay, nor would it count as an employment agreement.
The bonus is an additional payment given to an employee for the benefit of employee-retention and retention. The bonus would not be part of an employment agreement, nor would it affect severance payment terms or pension. It would not qualify for tax deductions.
The eligibility criteria for the lifetime employee-retention credit are flexible and open to interpretation. For example, it’s important to understand that the lifetime employee-retention credit can only be applied to the total amount of salary an employee has received from their employer from the date of employment. For example, if a minimum wage employee is entitled to receive $20,000 in compensation per year, the lifetime employee-retention credit would be $5,000.
The top ways to maximize the employee retention credit are given below:
- Put an employee retention bonus on the payroll and track it
Employees are motivated by compensation. If you can give your employees an opportunity to retain some portion of their salaries, you can build a strong employee-retention culture. So, tracking the bonus will help you to gauge its success and determine how to increase it. ERC is a relatively small monetary amount, but it adds up quickly. Make sure to track it so you can make adjustments to improve retention in the future. It’s also important to make this a permanent bonus, since it will always be there when you need it.
Employee retention is important not just because of the money it brings in, but because the retention of well-trained employees is the key to a business’s success. One way to meet this goal is to offer training in several areas including:
O Transition to new positions or roles
O Creating and managing a healthy work-life balance
O Creating an employee-business relationship
O Using digital tools to enhance your workforce and increase efficiency
O Handling transitions in health-care and retirement planning
O Managing workplace stress
O Conducting required employee health and safety training
O Improving communication
O Using social media to create a workplace culture
O Performing exit interviews
If you offer training for your employees, you’ll be more likely to retain them. To make it more interesting, use videos, such as how-to-videos, to improve your training and retention programs. You can also make your training fun. A sense of humor is always a plus in the workplace.
- Bring the employee-retention bonus with your new hire
By creating a culture of employee-retention, you can increase the chances of your new hires staying with you. That’s why you should hire employees who are ready for it. If you can do this, you can give them a big incentive. One way to do this is to have the employee-retention bonus be included in the offer you make to the new employee. If they take the job, you give them the bonus.
- Negotiate an increase in the employee-retention bonus
When you offer the employee retention bonus, you should always try to negotiate an increase in the amount. For example, if you initially offered a $10,000 bonus, negotiate an increase to $15,000 or more to keep your employees. After a certain amount of time, if retention is still high, you can drop the employee retention bonus, and begin to provide the employee a wage increase.
- Promote the retention bonus program on your web site
When you offer a retention bonus, you should promote it on your company’s website so that current and potential employees can find out about it. This will help them to decide whether or not it’s a good deal for them. It’s also a good way to gather more information about your retention program and how it is working.
- Advertise the value of employee retention credit to employees
One way to increase the value of the employee-retention bonus is to place ads for it on the job boards, which are the places new employees look when looking for a job. Take advantage of this marketing technique by offering a referral program to the employees who refer new employees.
- Offer an additional $1,000-per-year bonus to good employees
An important part of the employee-retention bonus is the other incentive. If your employees are performing well, then you should offer them a bonus. One way to increase this bonus is to give it to good employees only. If you are consistently hiring new employees, you’ll have to increase the value of the employee retention bonus.
- Manage employee retention by offering incentives based on the results of the incentives
Rather than giving the employee retention bonus to the whole company, you should only give it to those who have been a major contributor to the success of the company. In this way, the retention bonus can be a very good reward for someone who has been very successful at a high level. Also, consider the retention bonus in the context of the other incentives that you are giving employees. For example, if your staff gives you good customer service, you can reward that behavior with a $50 bonus.
- Give an “exception” to the bonus if it’s not working
If you’re not seeing good results from the retention bonus, you can offer a “cooling off” period. For example, if a staffer takes advantage of the retention bonus for one year and then decides to leave, you can still give them the full retention bonus if they have been a major contributor to the company’s success in the first year.
- Offer the retention bonus on a probationary basis
Another way to increase the retention bonus is to give it on a probationary basis. Employees who receive the retention bonus can’t leave the company until the bonus runs out. Also, employees can only accept the retention bonus if they are hired for a specific job or activity.
- Offer the retention bonus based on performance
If the retention bonus isn’t working and you want to offer a bonus, you should give it on a performance basis. The employee retention bonus can be used to motivate employees to do better and improve their performance in a specific area.
- Focus on the “main benefit”
When you look at employee retention bonuses, focus on the “main benefit.” This means you should look for something that will get the employee to stay with the company for a longer period of time. Keep in mind, however, that there is more to the employee retention bonus than just this one thing. This is the most important point of all, and it will determine how well it is received.
At the same time, it’s important not to over-emphasize one point over the other. A retention bonus can be rewarding for the employee, and it can help you retain the employee, but the two are not necessarily related. At the same time, over-emphasizing one point can make a bad retention bonus bad. The key is to make sure that your bonuses are well-tailored to the needs of your company and the employee retention program.
- Extend employee benefits
You should allow your employees to keep their health benefits during the retention bonus period. ERC programs allow you to help employees save on health care costs, and this incentive can help keep your staff happy and satisfied during their time with you.
- Focus on problem areas
When you look at employee retention bonuses, you should focus on employee retention within a specific problem area. That way, you can identify the area where they need the most help, and this can help you keep the employee with you for a longer period of time. In addition, if you can pay for some of your employees’ raises or increase the retention bonus, you can help the employee maintain a higher quality of life within the company.
- Offer flexibility
If you need to change jobs, or if you want an employee to take on a job for which they are not suitable, you should offer flexible working hours. ERCs programs give you flexibility to allow employees to do whatever they need to do to do their jobs. If you offer flexible working hours, you can keep the employee happy and satisfied.
- Give ERC retroactive value
Because the program is not part of your employment contract, the program can be administered retroactively, giving the employee the full value of the bonus for their previous year. This helps you retain the employee for longer. It will also allow them to find a new job with a higher wage.
- Keep bonuses as a long-term incentive
Because employee retention bonuses are not attached to your employee’s base pay, they can be given as long-term incentives, meaning that the employee gets a bonus for meeting certain standards. This can be seen as an investment, in which the employee will receive the bonus after the new pay raise has been established. It can help you keep the employee for a longer period of time.
- Give employee loyalty bonuses
You can also give an employee loyalty bonus. An employee loyalty bonus means that you will pay an additional amount of money to retain the employee for a specified period of time. If your retention bonus is a good one, it will allow the employee to stay with you for a longer period of time and will help you develop a good employee-employer relationship.
- Communicate the details of the program
Be sure to inform your employees of your employee retention bonuses in detail. They will be able to see exactly how much money they will get for doing their jobs, and you should provide the employees with all the information you can about the program.
- Keep your employee retention bonus rules consistent
You should also make sure that you are not changing your retention bonus rules from one year to the next. It will also be helpful if your bonus rules are consistent with those of your competitors. Having consistent rules will help your retention bonus program stay competitive.
Recruitment Mistakes
If your company makes any of the following hiring mistakes, it can lower the number of employees who stay with you:
- Hiring the wrong employees
You should be hiring employees who are qualified for the position they are applying for, and who meet the company’s job description. Hiring employees that do not meet these requirements will lower the company’s overall quality of hire. This will decrease employee satisfaction, which will ultimately lower your retention rate.
- Not doing proper research before hiring employees
Before you make any hires, you should thoroughly research your target audience to make sure that the right employees are hired. This means interviewing prospective employees to determine whether they are the right fit for the role.
- Hiring the wrong person
You should also consider that most employees leave the job they are at to take up another job. This means that they are likely to be leaving your company. If you hire the wrong person for the job, they may remain in your employ, and this will reduce your overall retention rate.
- Hiring employees who are unreliable
In most cases, employees who are unreliable will create a bad impression on your employees, which will lower their overall satisfaction with your company. Avoid hiring people who are unreliable.
- Hiring employees on short-term contracts
The longer an employee remains with your company, the more they will be able to build a positive relationship with the employees and the management team. Hiring employees on short-term contracts can cause problems, as they will be less likely to stay with your company. If your employees feel that they have a chance to move to a different company, you are likely to lose them, which means your retention rate will be low.
One last thing you can do to keep your retention rate high is to implement a formal employee engagement program. Make sure that you create a specific policy that establishes the role that employees play in the growth of the company. This will ensure that everyone understands their role and responsibilities, so that they can be aware of what is expected of them, and they will do their best to fulfil these tasks. If you’re doing your job right, then your employees will not be in a hurry to leave your business. The key to keeping your retention rate high is to spend the time and money required to train your employees and retain your top talent.
Conclusion
ERC allows you to manage the process of hiring, training and promoting your employees. It will allow you to have someone, who will help you develop your employees, and make them more marketable. In summary, you can say that keeping your retention rate high depends on how well your company manages its employees. If you hire employees, train them and promote them, then you are likely to have a higher retention rate. This means that your company will be better off.
We hope that the above-mentioned tips will be of some help to you. If you would like to know more about how ERC can help you, then visit our website today. Discover how to keep your retention rate high by doing business with our company.
If you would like to discuss any of our offerings, then our customer support team is always ready to assist. For queries, comment in the comment section. We would be happy to answer your questions.
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