Preferred Compensation Plan
Times have changed in the workplace and employees no longer have several jobs in one career, but rather, they may have several careers in one lifetime. As the workforce opts to become more and more varied in their skills and personal enterprise, employers benefit from their versatility, but also risk losing their skills and expertise to competitors in their industry and even to other industries.
Recruitment and retention are no longer the business investments they used to be, so employers need to find strong incentives to retain valuable and often key employees. These employees’ skills and expertise may be crucial to the successful running of your business, but how far are you prepared to invest in them before they wander off to your competitors for something as “trivial” as a higher salary and the opportunity to work flexi-time?
SA Financial Planners understands your need to retain your essential employees, especially as qualified and experienced candidates become harder to find in South Africa. One way to do this is with a Preferred Compensation Plan, which allows you to increase your key employee’s salary, which will vest in him or her after a certain amount of time (between five and 10 years). They will receive a tax-free lump sum for sticking around and continuing to contribute to your business success.
The lump sum is funded by an endowment policy, so even if the promise of a future bonus doesn’t help to retain the key employee, your business can still benefit from the maturity of this policy, recovering the amounts that were invested in an end-goal that was ultimately not achieved.
Contact us for more information on how to offer these protected incentives to your most valuable employees.