Employee retention - possible measures by the employer

Skills shortages, demographic change and other changes in the world of work mean that employers are constantly having to come up with new measures to attract, motivate and retain employees in the long term. Let's take a closer look at some of the most relevant measures, especially with regard to employee participation!

The importance of employee retention in today's workplace

The most important asset of any company is its employees - because they contribute their expertise and passion for the job directly to day-to-day operations. This makes it all the more dramatic for employers when employees resign or cannot be hired in the first place. Demographic change is also putting a (further) crimp in the plans of many employers.

Recruiting and retaining employees thus takes on a whole new significance. In particular, when employees in positions that are important for the company's success leave or change employers, the entire company suffers in the long term. After all, the respective successor has to familiarize himself again and again with the projects started by the employee who has left.

It has also been statistically proven that a high level of employee satisfaction increases productivity, reduces sick leave and increases loyalty and identification with the employer.

Possible measures to retain employees

In the potpourri of employee retention, numerous measures exist that have already proven successful in the past and across many industries. These include the following steps employers can take:

1. Establishing rational loyalty: This is achieved by giving employees the feeling that there is an appropriate relationship between performance and reward. Possibilities for the employer include offering regular salary increases, employee shareholdings, company cars and a level of trust commensurate with the employee's performance, or approaching the employee accordingly.
2. Emotional commitment: This is characterized above all by intrinsic motivation, which arises from the fact that employees can see and recognize a meaning in their activity as well as a concrete work result (added value). Closely related to this is the appropriate remuneration or reward for such performance.
3. Progress in digitization: Digitization is now making its way into all companies and processes, even in supposedly "analog" industries such as the skilled trades. In order to appeal to young people in particular, employers must be suitably progressive in their approach
4. Health and fitness: Whether it's free or discounted membership, height-adjustable desks or the option to take internal health courses, health is becoming increasingly important, especially in the workplace. As an employer, rise to the challenge and offer your employees the appropriate opportunities.

Employee shareholdings as the "supreme discipline" of employee retention

Employee shareholdings are one of the most rational measures for retaining employees and are also one of the most effective. This is because with direct participation in the company's success, employees not only see the successes they have achieved in the company itself, but also benefit monetarily from services rendered. A distinction must be made between "real" and virtual employee stock ownership plans (ESOP and VSOP):

• ESOP: Under the ESOP (Employee Stock Option Plan), employees are given the option to acquire shares in the company at fixed conditions. The employee thus becomes a genuine shareholder, is liable on a pro rata basis and participates in all the company's successes, in particular profit distributions and hidden reserves in the event of an exit. The disadvantage is the complex legal processes associated with the transfer of shares.
• VSOP: In the case of virtual shareholding, the employee is not a "real" shareholder, but is merely treated as one on a contractual basis. They therefore participate in profit distributions and exit proceeds, among other things. All processes under company law and liability are eliminated; "distributions" are operating expenses for the employer and current income from employment for the employee.

A VSOP is particularly suitable for the flexible structuring of employee shareholdings, as the time-consuming processes required under company law are no longer necessary.

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Disclaimer: The contents of the information offered at esop-direkt.de do not constitute legal advice. If you require a legal review of your individual case, please contact our specialized team: beratung@esop-direkt.de