I’ve lost a gun performer – how can I compete with the money big companies offer?
Wednesday, May 23, 2012/
Dear Aunty B,
I have just lost a top member of our management team to a large organisation.
I tried to keep him using all the tools in my arsenal but in the end it came down to money. I couldn’t match the large salary offered by a competitor.
How can we compete?
Well, a few years ago you could have offered equity in the company but the Labor government stuffed that up! Now an employee who gets equity has to pay tax up front, which means you give them an incentive and a whopping tax bill. Some incentive!
You can always use a shadow equity scheme whereby you pay the equivalent equity as a bonus when there is an event such as a sale.
But you know what? In the long run – and if you have tried everything else – it is cheaper and easier to pay the higher salary. You can’t afford it?
Think about recruitment fees, lost time while they get up to speed, the risk of a new employee and strategic downtime – the time it takes until the new person is so up to speed that they can contribute to the strategy of the business.
Then you make your decision.
Your Aunty B
To read more Aunty B advice, click here.
Email your questions, problems and issues to [email protected] right now!
Be honest about your situation: How vulnerability helps businesses thrive Sue Parker DARE Group founder
Own it: The 10 things you need to do to manage your personal brand Lisa Stephenson Who Am I Projects founder
Six invaluable lessons: What 20 years in aged care taught me about being an entrepreneur Natasha Chadwick NewDirection Care founder
An entrepreneurial superpower: Eight tips to help develop resilience Adala Bolto ZADI Training co-founder
Going through a lull? Five areas you should invest in when sales drop Tamara Alaveras and Sonia Majkic 3 Phase Marketing co-founders
Stop telling us how busy you are, it's boring and charmless Ian Whitworth Scene Change co-founder
Blandification™ and the state of modern branding Jeffrey Oley The Offices co-founder
Why you should find the right role for the right person — not the other way around Bruce Stronge Outfit founder