Navarinou 10, 1100, Ayios Andreas, Nicosia

savvas@insurancelinkcyprus.com

         

70 08 88 83

Nothing we do is more important than hiring people. At the end of the day you bet on people, not strategies

Key People Retention Planning

Key People Retention Planning

It is no longer enough for businesses to simply put together an amazing team. The key to success and longevity in today’s competitive business environment begins and ends with employee retention. The financial implications of a high turnover rate, where the cost of training and recruitment is lost, are high. The cost of losing a key employee rise according to position. Retaining key employees is a critical financial, as well as strategic, consideration for your business. One very effective way to retain Key people is to use Golden Handcuff agreements

Key People Retention Planning

What is a Golden Handcuffs Agreement?

Golden handcuffs agreements refer to financial benefits that have the objective to encourage highly compensated employees to remain within a company or organization instead of moving from company to another. According to the agreements Vesting Table, financial benefits endow only when the employee has been with the company or organization for a certain number of years, and, consisting of bonuses or other forms of benefits which must be repaid to the company if the employee leaves before the date agreed on.

Usually a very effective way to do a golden handcuffs agreement is to tie them to an insurance plan as main funding mechanism.

Besides the normal contribution of the employer to the plan, extra compensation payments from company dividends, can be paid to the plan and usually gives the best results, as it gives an employee of a company using the technique a motive for staying with the company and making it grow, since the dividend  increases in value alongside the company. To create a contract that benefits both the employee and the company, a legal team should be contacted in order to discuss available options, and key employees should be distinguished from others.

white signature

Savvas P. Christoforou

CLU FLMI MBA LUTCF

Chartered Insurer

 

..if they stay, they get the benefit,
if they go they lose it!!

Why Companies use Golden Handcuff?

Undoubtedly, the institution of insurance is the best ways of protection and assurance for all of those that we are surrounded by and we love, whether this is our loved ones, our company, or our property. Every year, insurance companies pay millions of euros for claims and benefits to their insurers. At the same time, the institution of insurance positively contributes to financial stability of society and serves millions of persons and companies worldwide at the time when they need tangible support. However, nobody can be sure whether his or her insurance coverage is necessarily the correct one or at least the most appropriate. Unfortunately, many insured people when they had a claim on their insurance, they realize that for a long period of time they were unnecessarily paying for the wrong type of insurance.

Advantages of Golden Handcuff agreements

The advantages are there for both the organization and the employee. The employee will be able to get lucrative pay packages and see his true worth in a company. The more the pay structure, the longer the employee might stay with the company and work more for the company – this is what the company wants.

To learn more about how I can help your business with retaining key employee form the form below.

I am interested
RSS
Follow by Email
Facebook
Twitter
LinkedIn
Share