A while back I wrote a piece on Key person insurance. A good Key Person Insurance strategy can be really helpful in protecting your company against losses as a result of a key person’s sudden or unexpected loss of ability to come to work. One reader asked if a Key Person Insurance strategy could protect against your personnel being recruited to your competitor or just choosing to up and quit.
The simple answer to that is, not directly. However, Key person insurance can be structured to help build a fence around your people. There can be many ways of using various building blocks to build such a fence, either as part of, in conjunction with, or complimentary to, your Key Person Insurance strategy.
Let’s discuss some of those ways. In each case, the objective is to establish a sense of loyalty and appreciation as well as vested interest in the companies success.
Time and again we are reminded that people need to have a sense that they are appreciated in their work. Employers that regularly recognize and empower their employees, enjoy a higher level of loyalty among their employees. Fair remuneration is important, but it is not always about the money. Job satisfaction comes from the ability of one’s work to fill as many of life’s needs as possible.
Pay provides a very basic need that your employees have. The finances that they need to house, cloth and feed themselves and their dependents. This basic pay is essential for them to do that, but might not help them with other needs such as health and dental costs, retirement savings, or even saving for a vacation. A more comprehensive compensation plan, including benefits, retirement savings and vacation time may help employees to feel appreciated and valued.
Likewise, empowering your employees to have more say and control over the work they do provides a sense of ownership and contribution. They will work harder and more productively and have more loyalty in an environment that makes them feel fully engaged with an appropriate level of autonomy.
Sometimes you have an employee that is very important to your bottom line. A key person. Perhaps all the above are already in place. Can you do more to build a fence around them. Yes. There are other measures you can take. You could enhance their benefits, offer a bonus, offer an Executive Health Savings Plan, extra vacation time, or even partial ownership in your company. Such measures will help to provide a vested interest with those key people that your business depends on to continue to be competitive in the market place.
At Black Edge Advisory you can expect excellent advice in this regard, backed up by the resources available through one of Canada’s largest MGAs with access to nearly all related products available in the country.