The Loading Growth Blog

GROWING A-TEAM

How do you attract high-performing consultants into your business? How do you nurture them so you won’t lose them? We give you practical tips that you can apply right away to keep your team motivated.

Is it worth giving equity for salary and loyalty?

Big accountancy firms show that sharing equity to your senior and high-performing team members plays a big role in business success. But what’s the ideal share scheme?

Watch the video to find out!                      

Is it worth giving equity for salary and loyalty? What Framework do we use to validate giving equity to staff members? Plenty of information out their that proves the best consulting firms use equity through share schemes to motivate the senior team. Just have to look at the big 4 accountancy firms as proof. If used wisely, share schemes can be a large driver of growth, as well as help you compete for senior talent. A good rule of thumb would be to make available 25% of equity value beyond ‘founder shares’, to qualifying staff that seriously want to grow your business for you. Start an equity scheme that shares increases in company value with those that help to create it. 

Sharing a portion of your business profits to your A-team is a viable strategy to keep them motivated. 

It’s a good scheme, especially if you are a new company and have not enough cash flow for additional benefits. 

Equity sharing also gives your people a sense of ownership. If they know they earn a portion of the company, the tasks cease to become tasks. 

Why?

Have you ever heard of a business owner complaining why he has to do something for his company? 

A business owner will do everything in his power to make the business successful and grow. 

But how much of the company profit should you give to your employees?

Here are a few considerations to help you a profit sharing plan for your business:

 

  • What is the main purpose of the scheme?

Why do you want to have this scheme? Is it to boost production, to retain high-performing employees, or to attract talents? Or maybe you want a combination of all. 

Defining your main objective will help you determine what equity sharing plan is most effective for your team. It will also prevent you from over or underpaying your employees. 

  • What kind of reward will appeal to them?

Each member of your team has a different motivation. Cash awards might appeal to some, but not to others. 

Do you have a fresh, young team? Perhaps they will be very excited about stock options. Meanwhile, older team members might want something that will add to their nest egg. 

The percentage differs from industry to industry as well as the size and type of business. For IT consultancy firms, a good number is around 25%.

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