You run a successful business. How big do you want to grow your business?
If I take care of all the reasons the business goes down, the business only grows. Identify all the reasons that bring your business down, and take care of that by removing them.
How important is the person who takes care of your business? What have you done for him to not leave you? If someone else matches paychecks, will he leave?
The company is valuable because of two reasons:
1. Your vision.
2. Your execution.
But execution is done by your employees. Your employees execute your vision, and that is what grows the company. Now, employee retention has become the biggest problem in the 21st-century world because we work with millennials, and this workforce doesn’t believe in loyalty. They work for 3, 5, or 7 years and then move to work for another company. So how do you retain this talent who always wants to move to the next level or the next opportunity? The old strategy in the 20th century was to give promotions to ask them to stay.
Nowadays, if you give a promotion, they jump to another job because they feel they are more valuable in another company since they have been promoted.
The 20th century was about working with a company and retiring with a company. The 21st century works with a company, moves to another, moves to another, moves to another so that you gain experience, and that is the 21st-century problem.
We need a system to extend because we can’t stop them from leaving the company to the company in the next 3 to 7 years. All you can do is delay the moment. Because the longer they stay with you, the better the return on the recovery of training you invested in, and you can plan better for resource replacement.
It’s called vesting strategies. It runs for 3, 5, & 7 years.
Most employees stay with you for approximately 3 years. If you want to extend their stay by 3 to 5 years, you need to give them the incentive to stay with you. If they don’t stay with you, the money is yours. You can use this money to acquire talent, acquire competitors, and acquire talent from the market. You need to set aside money either for retention or acquiring talent. It’s called the vesting strategy. After 5 years, you can extend it to another 2 years. After 7 years, you need to give stock options and profit-sharing for them to retain to give them the ownership feeling, or else retention becomes very difficult.
Vesting strategy is the key going forward.
