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
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