how to encourage retention and share profit with a key employee

by a searcher from The University of Chicago - Booth School of Business

3 years ago

Hi all.  Long time listener, first time caller.

I bought a corporate catering business in September 2019 and then was crushed by COVID and more specifically WFH patterns that kept people from meeting. 

After a disastrous 2020 and mostly horrible 2021, along with some bumpy starts/stops, we are finally seeing people heading back to the office and I think we are going to make it.  I have one (or to a lesser degree 3) key employees who have been with the company 15 years or more, and I want to create an incentive structure for them.  Goals would be: 

1) encourage them to stay, 2) reward them for their leadership/loyalty and 3) share in the profits of the company.  I would rather not simply add them to the cap table, as I don't want partners, especially ones that have left the company after they have vested.  If you have models that have been successful in the past, and particularly if you have examples of the agreements you put in place in a similar situation, I would love to hear from you.

3 likes
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21 comments

searcher from College of William and Mary

Once you have taken some of the initial steps referenced above, the overall goal is to create an environment where people will want to stay and grow. That starts with leadership. Management is the number 1 reason employees leave.

2 years ago | like reply | 0 likes

intermediary

Quarterly bonus programs that offer the optics of profit-sharing will give you more loyalty from your employees and in the long run reduce attrition. Losing employees and having to train new ones will cost you more in the long run and hurt overall morale.

2 years ago | like reply | 0 likes

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