How Deferred Compensation Plans Can Benefit Your Business

If you're experiencing a high volume of turnover with your employees, you're not alone. Since 2010, the employee turnover rate has increased by a staggering 88%. Today, companies are going to great lengths to keep employees on board to improve employee retention. While beer carts and casual Fridays are a nice perk, deferred compensation plans are a monetary way to create motivation and an incentive to stay, long term, with current employers.

For years big companies have offered deferred compensation plans, including stock options or restricted stock units (RSU) that vest with an employee over four years. Non publicly traded companies were at a disadvantage by not having these compensation options. GCE created the concept of a profit unit to mimic these deferred compensation tools.

 How Can I Implement a Deferred Compensation Plan?

There are a plethora of ways to implement a deferred compensation plan for your employees. Because every business is unique, so are profit goals, and GCE makes your compensation plan goal the center of our customized programs. With the help of GCE, employers can offer deferred plans based on the number of years employed, profit goals, performance, and other goals that are strategic to your mission. In most cases, all of these components work together to create the best plan for you, your employees, and most importantly, your bottom line. The first step to creating a plan that works for your business is to book a consultation; let's start the conversation.

What Are the Benefits of a Deferred Compensation Plan?

So, what are some of the benefits of offering a deferred compensation plan? First, a significant boost in morale and motivation, which in turn produces higher sales. Often, when GCE is working with a business to curate a customized compensation plan, a specific profit goal is at the center. Once that goal (or a certain percentage of the goal) is met, every eligible employee benefits on some level. When employees are working together to reach a specific number goal, more often than not, revenue increases. An additional benefit of GCE creating a compensation plan for your business is the increased teamwork. Everyone has to do their part to ensure the goal is reached. A profit-based, deferred compensation plan is one of the best ways to ensure everyone is doing their part department-wide. Finally, one of the most significant benefits is employee retention. Often, businesses come up with a deferred compensation plan that will award employees, over time, a higher bonus based on the number of years employed with the company. In doing this, a person will be rewarded for staying with that employer and create less turnover. The cost of replacing an individual employee can range from one-half to two times the employee's annual salary. Can you afford to have more employee turnover?

Let’s Connect About Your Business

GCE would love to work with your business to develop a compensation plan for your employees. We work alongside you to dive deep into your profit goals, what your company can afford to compensate your employees, and discuss which plan would be best for you. Then, we customize each plan to your business's size, goals, and needs. Contact us today to get started on a plan that pays.