An employee retention agreement is a contract between an employer and the business that outlines specific terms of employment; specifically, that the employee will remain at the company for a set period of time and be provided a guaranteed bonus after a set length of time.
This type of agreement is designed to help your business retain valuable employees during periods of uncertainty and transition. For example, if your company is facing a merger or other management changes, then you may want to consider an employee retention agreement to encourage your most valuable employees to remain with your company during the periods of change.
Keeping Employees Saves Time and Money
As business owners well-know, hiring and training employees takes copious time and resources; When staffing and training require a significant time investment, this hinders your ability to successfully operate your business. Using predetermined retention agreements to establish term lengths for employment can be beneficial to a business and to the business owner’s time management. Simply put, retention agreements can minimize turnover.
When an employee leaves your company, there is a disruption in productivity that is felt throughout the organization. Employees in other departments may be reassigned or assume extra duties which were formerly handled by the employee that is gone, affecting overall productivity and efficiency.
Consistency Improves Workplace Morale
If an employer can retain people in key positions, then the consistency of employment can translate to business’ stability for other employees and for the general public. When a senior employee does leave a business, the uncertainty about his or her replacement and how those personnel changes will impact the business may have a negative effect on remaining employees.
As mentioned before, sometimes other employees have to cover shifts or duties of an employee who has left the job, resulting in an uptick in the remaining employees’ working hours. Often, the stress of an increased workload can result in decreased morale. On the other hand, long-term employees can provide stability to the workplace and can bolster productivity and morale.
Maintaining Key Staff Can Have a Positive Effect on Development
Whether your company works with donors or with clients, maintaining good working relationships with the individuals or companies you serve can affect your bottom line. Clients and donors will feel comforted if they know that they will be interacting with the same individual at your company if they have a question or concern.
Additionally, a company can build outside relationships from contacts that a long-term employee brings into the fold. It is beneficial for all parties to develop external relationships for lasting viability.
Talk with an Attorney About Crafting Retention Agreements
Finding an equitable and advantageous relationship with a long-term employee is important, and the attorneys at Simon | Pascal, PLLC can help you craft a retention agreement contract to accomplish those goals. Contact us today to schedule a consultation to discuss all of your business needs.