An offer you can’t refuse

I run a software consultancy company in a highly competitive market. We have a few rain -maker employees who generate excellent profits and I am keen to know what I can do to encourage them to stay. Can I ask them to sign long fixed-term contracts or pay them a bonus which is repayable if they leave within a certain period?

The most obvious solution might seem to be a long fixed-term employment contract. However, you cannot force an employee to work. So, in practice, the employee could walk out at any time, despite what his, or her, contract says. The company would have a claim against the employee for breach of contract, but such claims are rarely pursued in practice due to the expense and the difficulty in proving any loss to the company.

One alternative is to pay the employee a bonus, either now or in the future. An immediate bonus will be attractive to the employee, but it may be virtually impossible to recover the bonus if the employee leaves. Claw back provisions must be drafted carefully to avoid being held as void or unenforceable, and you had to consider whether you are actually be able to collect

A promise of a future bonus, based on the achievement of targets, is a much better option from the company’s perspective. The employee will be incentivized to work hard to meet the targets and there will be no need to worry about claw back. Do not to underestimate the significance of non-financial incentives; a culture of supportiveness, encouragement and good career progression will go a long way to keeping key employees happy and less likely to look elsewhere.

We all love money but, there are more ways to solve this problem than merely through the cheque book.