COLE TAYLOR TALKS
Capitalizing on Your Human Capital
By Jeff and Bruce Taylor
What keeps good people dedicated and motivated—and most important, on staff at your company? As business owners, we consider this question quite often.
Recruiting, and then retaining, talented and skilled employees is critical to the success of any business. We have learned first-hand just how important it is to keep the most industrious and talented employees on board.
Employees who are motivated and committed often have a direct stake in a company’s success. Understanding this key fact, we have developed some employee recruitment and retention tactics, involving stock ownership and succession planning, executive-level benefits and training.
Building employee investment in the company
An Employee Stock Ownership Plan or ESOP is a type of defined contribution benefit plan that buys and holds company stock. Research has shown that giving employees a significant stake in their companies can improve their attitudes and work effort and this in turn results in reduced turnover and an improved bottom line.
When a company establishes an ESOP, a trust is set up to which the company makes annual contributions. These contributions are allocated to individual employee accounts within the trust. The most common allocation method is related to compensation, but others can include allocating stock according to years of service. Our employees are automatically enrolled in the ESOP plan and begin receiving allocations after completing 1,000 hours of service with the company.
In addition, many companies provide other ownership opportunities such as providing key staff with an opportunity to invest in a partnership that owns the company’s facilities or is formed for the purpose of undertaking a specific business venture.
Succession planning sounds like something an owner considers when passing on the company reins. Actually, succession planning should be an everyday occurrence. We help our junior employees gain a firm foundation at the bank by acquainting them with how the business is run early on. Many attend senior-level executive meetings to observe, learn and participate. Keeping the knowledge and skills that your employees develop within your company ensures business continuity in the future.
Creating a motivated executive force
Executive-level benefits such as Deferred Compensation Plans and Supplemental Executive Retirement Plans (SERPs) are tactics designed to retain your valuable executive base. We offer both.
- Deferred Compensation Plans. These plans allow high-level participants to defer current compensation, including bonus pay, in amounts beyond the contribution limits imposed in a qualified plan such as a 401(k). These plans also may be designed to allow for discretionary company contributions.
- Supplemental Executive Retirement Plans. These plans are used to provide retirement benefits over and above benefits payable from a qualified retirement plan, such as a 401(k) or an ESOP.
Another commonly used executive compensation strategy is providing stock options. Stock options have proven to be a highly effective incentive for executive retention and employee buy-in.
Developing your human capital
Two of the main ways that we develop our human capital are creating individualized career development plans for employees and offering comprehensive internal training programs and access to external professional training programs.
Any company can employ the retention tactics we have covered. It is not just the larger players that can attract highly skilled staff. Along with the inherent advantages smaller companies enjoy in attracting talented employees who want to have an impact, these programs allow us to compete very well against our largest competitors.
Jeff Taylor is Chairman and Bruce Taylor is President and Chief Executive Officer of Cole Taylor Bank.
What does your company do to retain employees? Email us at [email protected] and let us know.
Employees who are motivated and committed often have a direct stake in a company’s success.
Visit us at
www.coletaylor.com
