Prevent your company from losing its most valuable assets: its employees…

?In an era where employee loyalty is increasingly elusive, with one in four employees contemplating a job change (as per the 2018 Work Institute Report), businesses face the challenge of preventing nearly 77% of that turnover, according to the same report. The departure of a key employee can create a knowledge void, placing a company in a precarious position. Without robust retention strategies, losing a crucial team member can prove not only costly but also destabilizing.

In today's dynamic labor market, characterized by frequent job transitions, businesses must strategically reward and attract top talent. A 2018 report titled estimates that employee turnover costs the U.S. economy a staggering $30.5 billion annually!

Amidst the backdrop of an industry-neutral business status and reputation, how can a business stand out in the crowded field and enhance its attractiveness to potential employees? Given that highly skilled professionals often have multiple options, consider the following strategies to retain and attract key talent, thereby strengthening your value proposition:

SALARY CONTINUATION

Designed to offer supplemental retirement income to select executives, a salary continuation plan can be funded by the employer and, if properly structured, leverages permanent life insurance to provide future benefits to key employees and their beneficiaries.

EXECUTIVE BONUS PLAN

Instead of a conventional cash bonus, contemplate offering key executives a bonus in the form of a premium payment towards a permanent life insurance policy. This tax-deductible expense benefits both the business and the employee, providing death benefit protection, living benefits in the event of a qualifying illness, and the potential for tax-free loans and withdrawals from the policy's cash value.

KEY PERSON INSURANCE

Purchased by a business on an owner or essential employee, this life insurance policy, owned and payable to the business, provides critical financial support in the event of the key person's death. This ensures the business has access to cash when it's most needed, preventing disruptions and potential financial instability.

SPLIT DOLLAR ARRANGEMENTS

This approach allows businesses to assist key employees in acquiring permanent life protection. Unlike an executive bonus, split dollar arrangements enable businesses to recover premium payments later. Whether through a Loan Regime or Endorsement (Economic Benefit), these plans serve as golden handcuffs, rewarding and incentivizing key employees for long-term commitment.

?Selecting the most suitable plan depends on the unique circumstances and goals of your business. Consult with your trusted advisor to navigate the nuances of each option and determine the most appropriate course of action.

?Disclaimer: Living benefits, policy loans, withdrawals, and riders are subject to specific conditions and regulations. Consult your financial advisor for personalized guidance.

Xavier Lannes