Key Employee Retention Strategies for Business Owners
Since before the beginning of the pandemic, small business owners have been struggling with the Great Resignation. As much as 44% of the workforce is actively seeking new employment (Willis Towers Watson's 2022 Global Benefits Attitudes Survey). That statistic also suggests that the Great Resignation, a pandemic-era labor trend, is continuing even after things are starting to open up.
More than half of employees who seek a new job say that higher pay is a top reason for seeking new employment. In fact, almost half of employees are looking for a new job or plan to soon, and the trend is continuing through 2022. The data shows that employees are prepared and open to going elsewhere. The Great Resignation has been a hallmark of the U.S. labor market since spring 2021, when the economy began emerging from its pandemic hibernation and demand for workers grew among businesses. Therefore, retaining your best people at this moment is paramount to the continued success and growth of your business.
Employee Retention is a Smart Business Strategy
Employee retention is not just an auxiliary concern for business owners — it is a smart business strategy, too. By investing in your employees, you are directly impacting your bottom line and ensuring you have a satisfied workforce, who in turn, will produce a better work product.
Losing key employees can have a detrimental impact on the overall company culture and lead to decreased productivity. For this reason, savvy business owners are getting ahead of the resignation problem by implementing smart retention strategies and tools to attract new talent.
Employee turnover is costly for business owners and can cause irreparable damage to a company's culture. Research indicates that replacing an employee requires the business to invest anywhere from six months to two years of that former employee's salary into recruiting, hiring, and training.
Some Strategies Affect Tax Filings
As a leader, it’s important to implement the right kind of benefits to retain your staff. An idea like gifting company stock may seem like a worthwhile concept. While this is an attractive incentive for many employees, there are some things that you, as an employer, should consider.
As with any decision surrounding finances, there may be unwanted tax consequences. As far as the IRS is concerned, there is no true way for employers to give a gift to employees as every value item will be considered income during tax season — and stock is no exception. When employers give stock to employees, the recipient will be required to pay income tax, and the business will be required to pay payroll tax. These two expenses can quickly devalue the stock transfer both for the employer and the employee.
If at any time you need a better understanding of equity compensation, employee retention strategies, new talent attraction tools, or how the Great Resignation may be impacting your business, please contact our office. Decisions you make today may impact your tax filings. We are not tax advisors, however we do work with your CPAs and tax professionals to help create a plan that benefits you, your employees, and your business.
Contact us today to learn more about our planning services and how we can ensure you get the most of every dollar you earn. Visit our Website or listen to the full Portfolio Pulse Podcast episode for additional information.
Guardian, its subsidiaries, agents and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.