With the national unemployment rate of more than 10 percent, it may seem antithetical to be concerned with employee loyalty. Seriously, where would they go even if they wanted to leave? Well, they may not be able to jump ship immediately, but make no mistake, when the economy recovers, all bets are off. That means that the untold hours spent recruiting, onboarding and training your best employees may be lost. That’s difficult to bear for the largest of companies, but for channel partners that are mostly small businesses, this can be extremely disruptive. If yours is a five-person shop, one defector can mean a 20 percent workforce reduction. That deficit impacts your whole team profoundly, and puts pressure on you to fill the gap. In the same way that it cost less to keep an existing customer than to find a new one, the same can be said of employees. Only here, the costs are not only financial, but a lot of pain and suffering. Fortunately, just as you can build customer loyalty, there are things that you can do that engender employee loyalty. A search on Amazon.com returned nearly 7,500 books on the topic of employee loyalty. Clearly, there’s no shortage of advice. For this article, however, let’s look at a few creative things that channel partners are doing to help keep employees happy.
Share the profits. You can offer traditional financial benefits like 401K plans — and some agencies, like master agency ADVODA Communications Inc., Greenwood Village, Colo., do — but there are other ways agents are letting their employees share in the fruits of their combined labor.
ADVODA, for example, gives each of its 20 employees part of an annual bonus pool. Their individual stakes correspond to the number of years they have been with the company, explained ADVODA President Ron Dunworth. So, a new employee gets one share while a founding employee would have eight since the company was formed in 2002. All shares are added up and divided into the bonus pool and distributed. A byproduct of this program, said Dunworth, is headcount control. He said since the staff knows that adding employees reduces their shares, they often will work harder as a team to avoid new hires until absolutely necessary.
Agency ARG, based in McLean, Va., has a similar revenue-sharing program. ARG CEO Greg Praske explained that all of the company’s employees except owners are eligible. Each employee receives a portion of the total incentive amount, which is based on the company’s revenue growth, that is based on a percentage of their salary. Commissioned employees, who already have incentives on revenue growth, get a smaller percentage while managers, who have a greater ability to impact growth, have a larger one. At the end of 2009, ARG dispersed $150,000 to 35 employees. “It kind of keeps everyone pulling in the same direction,” Praske said.
