Building Horti-‘Culture’ is a Labor of Love
According to a 2015 USDA study, nearly 58,000 jobs become available each year in agriculture-related fields, but only 61 percent are filled by qualified graduates. North Carolina State University’s associate dean of the College of Agriculture and Life Sciences, John Dole, has stated that the University has more employers calling them than they have students to fill the jobs.
While a tight labor market in the green industry isn’t exactly new news, what is making headlines is the necessity for businesses to come up with creative strategies to address the ultimate drawback of this labor shortage: the poaching of key employees by competitors.
Let’s face it, establishing a winning, healthy culture that your employees love takes continuous effort and investment, and the employee reward and incentive programs are often the first things to face cutbacks.
For some businesses, the traditional retention methods of performance goals and reward systems can deplete cash needed for debt commitments and survival. For others, freeing up cash flow can help invest into an expansion, transition, or major technology or equipment upgrade. Whatever the reason, companies are looking for ways to manage and increase cash flow flexibility, without taking a hit to employee salaries, incentives, and employee morale and retention.
New Compensation Methods to Incentivize Employees and Create Cash Flow Flexibility
There are new ways to establish or maintain a competitive advantage, but without the drain on precious cash flow often disbursed in the traditional forms of bonuses, spot awards, and profit-sharing funds.
Many companies have started to evaluate the use of incentive compensation – that is, the portion of an employee’s salary that is related to performance, but not necessarily rewarded in money. These alternative compensation incentives provide the value that rewards select employees and maintains high performance levels, without the need for a cash payout.
There are a number of alternative compensation options and customizable plans to evaluate for each business, including:
- Deferred Compensation Tactics – used as an incentive plan; awarded to officers, key managers, key employees
- Cash-based deferred compensation
- Phantom stock plans
- Stock appreciation rights
- Qualified Retirement Plan Options – motivates and rewards employees; tax deferment tactic
- Employee Stock Ownership Plan (ESOP)
An advisor can help to assess the advantages and disadvantages, applicability, timing, and tax strategy that will best meet a company’s objectives.
“These incentives are changing the way HR departments are handling employee compensation structure,” says Danielle McCormick, partner for K·Coe Isom’s HR outsourcing team. “There’s a real impact happening here – providing new options to tackle age-old business challenges: rewarding key employees for better retention, optimizing cash flow for greater flexibility, increasing the value of the company through higher performance, and attracting top talent with a competitive advantage.”
AmericanHort has entered into an agreement with K-Coe Isom to provide services to our members. To evaluate which non-monetary compensation options would be beneficial for your business, contact MemberServices@AmericanHort.org. An expert advisor can lead you through the process, provide in-depth financial analysis and assessment, and help with implementation and employee education.