The war for talent is as fierce in the recruitment sector as it is in any other. Given that recruitment is predominately a people business, the need to secure and be able to attract top talent is critical to survival, short-term growth and longer-term competitive advantage.

Staff retention and attraction have long been cornerstones of successful recruitment businesses and should always form a key part of the business strategy. What were once considered market leading offerings to colleagues are now seen as mere entry-level minimums. Businesses must stay current and make use of new retention and attraction opportunities where appropriate.

Competitive salaries and commission schemes, car allowances, holiday entitlement, healthcare, flexible working, advanced onboarding and training, personal development, study leave, corporate social responsibility and equality, diversity & inclusion policies are now all part of the standard employee value proposition (EVP) that every business must be able to demonstrate and articulate.

Additionally, businesses are required to communicate a compelling purpose, mission, vision, values and leadership charter that galvanises and grows a successful team. These are essential foundations in developing a culture where people want to stay and people want to join. Many businesses put their emphasis on creating client and candidate propositions, at the expense of developing their colleague propositions.

While this was normally enough to secure most staff, it is no longer always enough to secure senior staff, management and leadership. This realisation has led many businesses to make use of an Enterprise Management Incentive (EMI) and, or a Long-Term Incentive Programme (LTIP) as part of their armoury, as they look to tie in key staff over a three-to-five-year period.

An EMI scheme is an employee share scheme, which is government approved, tax beneficial and a flexible way of incentivising staff. It is mainly used by small to mid-size SMEs and enables employers to reward employees for their efforts via share options that can give them an investment in the future of the business.

An LTIP is an incentive bonus that makes payments based on the achievement of specific goals and incentivises employees over a longer period, rewarding performance. The LTIP is not tax beneficial, but is highly effective as a scheme for incentivising and rewarding over a longer period.

Over recent years, the use of both the EMI and the LTIP schemes has grown considerably. Many examples have surfaced in the public domain of businesses creating and paying out on EMI schemes that have vested. Some high-profile businesses even advertise their EMI schemes and LTIPs on their websites, for talent attraction.

Some organisations use both EMI and LTIP schemes so that they can reward more of their staff. One business I work with has chosen to include every single employee in their EMI scheme. Their levels of engagement, productivity, retention, and results are outstanding. Coincidence? No.

A growing number of businesses have chosen to utilise the Employee Ownership Trust (EOT) model, which allows the employees to own the company by setting up a trust that owns more than 50% of the business. This provides owners and employees with a government-backed tax beneficial scheme that allows employees to buy out owners. The scheme allows for a maximum of 40% of the total staff to be part of the EOT.

Employee owners are responsible for all operational aspects of running the business. Through a trust that holds the shares, they “own” 51% of the business and will decide and execute all aspects of delivering the business plan. However, the business will continue to be operated by the existing senior management team, along with a newly formed Board of Trustees.

Businesses must stay current and make use of new retention and attraction opportunities where appropriate”

The profits generated by the business will be used to pay the owner for the shares that were bought by the Trust. When profits and cashflow allow, a contribution can be made to the trust, which is then available to be shared amongst the employees. Employees can receive up to £3.6k per annum tax free under current tax rules.

The EMI, LTIP and EOT offerings can be invaluable tools in creating cultures of shared success and collaboration. Leaders need to paint a compelling picture of the future and demonstrate the shared journey, the individual’s role within it and their subsequent rewards. The EMI and LTIP schemes help business owners to answer the increasingly asked, “Why should I stay?”, “Why should I join?”.

Sid Barnes is CEO of Mastermind Consulting and co-chairman and owner of Elite Leaders.

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