The Pony Express is as ubiquitous in Hollywood westerns as horses and saloons. You would think that it was a long-term fixture in the history of the western United States. Yet, the Pony Express lasted a mere 19 months, replaced by the telegraph.
The Pony Express wasn’t the first and certainly not the last business model to be rendered obsolete. After all, when was the last time you rented a movie at a video store, called a travel agent, or used a fax machine? Most households in the United States no longer even have a land line.
Smart business owners recognize that their business needs to evolve if they are to survive and thrive. Products, processes, and markets all change over time. Whether those changes are to the benefit or detriment of a company many times depends on its response to them. And how the firm responds is determined largely by the quality of the management team.
Options for attracting and retaining key talent
Attracting, rewarding, and retaining key talent has always been an issue for companies. And the best leaders always have options. Someone is typically always willing to offer more to get the best. So, how do companies compete? Equally important, how can you help them understand their options and which approach best meets their needs?
Many businesses take the most direct approach, cash compensation. Why? On the surface, it is the easiest approach. It also may be the only one that they understand. After all, many of the other options such as cash balance plans, deferred compensation plans, or employee stock ownership plans may be foreign to them or misunderstood at best.
How can an advisor help?
This is where the advisor can play a critical role. By educating the client about their options and the possible long term impacts it can elevate your role to that of strategic advisor. You can help them design and implement a more comprehensive approach that incorporates more innovative options. These additional options can include vesting schedules to encourage retention. They can lead to an ownership position that provides additional benefits in retirement. They can help a firm balance current, future, and anticipated retirement income.
This is a great opportunity for you to help the company, the executives, and your practice by providing solutions to a pressing issue for many firms.
As noted naturalist Charles Darwin stated “It is not the strongest of the species that survive, not the most intelligent, but the one most responsive to change.”
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The subject matter in this communication is educational only and provided with the understanding that Principal® is not rendering legal, accounting, investment advice or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, investment or accounting obligations and requirements.
t17080706d6 – 8/2017