Did you know that businesses lose almost as many employees as they hire every year? And it’s costing them big. The cost of replacing an employee averages between 60 and 200% of their annual salary, depending on the role. The result is a staggering $10 billion annual loss for employers, which is why employee retention has become such a critical issue for businesses. Keeping your existing staff happy and motivated so they don’t leave isn’t easy, but there are ways to ease the difficulties of this process.
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What is the Employee Retention Tax Credit?
The employee retention tax credit is a new incentive that allows employers to claim a tax credit of 50% of what they pay towards the retention of their current employees.
This is an incentive that was designed to help businesses retain more of their employees (who are worth more to them), rather than spending money on hiring new employees, training them and then potentially losing them in the future. While the concept of a tax credit may not sound like a huge deal, keep in mind that the employee retention tax credit can be worth thousands of dollars to your business.
In fact, it could easily be worth 10 times what you pay towards your employees’ retention each year. This is where it gets interesting. There are a number of ways to deliver employee retention value to your business clients. Read on to find out how.
How To Deliver Employee Retention Value To Your Business Clients
More than anything else, employees want to be appreciated and valued for their contributions.
Here are some ways you can deliver employee retention value by showing appreciation for your employees:
Hire the right people – This sounds obvious, but it’s important to remember that hiring the right people and having the best team members is the starting point to any retention strategy.
Reward them – A 2021 survey found that nearly 70% of employees don’t feel their employers are showing appreciation for their work.
Express gratitude – Remember to express gratitude towards your employees on a regular basis, even if it’s in small ways like sending them a handwritten thank you note or treating them to lunch.
Invest in their personal development – Most employees don’t expect to be rewarded with money alone. They want to be challenged and to feel like they’re growing personally and professionally.
Make your workplace a better place to work – It might sound funny, but you’d be amazed how quickly a toxic work environment can drive your good employees away.
How to Retain Employees With a Retention Tax Credit?
Retaining employees who are happy and engaged in their work can be one of the simplest ways to save money on hiring new employees.
Rather than spending thousands of dollars recruiting, hiring and training a new employee, you could spend a few hundred dollars retaining your current staff members.
If you’re planning to offer a retention bonus to current employees, be sure to let them know you’re doing so. This could be in the form of a company-wide announcement or a company-wide email.
It’s also important to make the terms of the retention bonus clear. For example, employees may be wondering if they have to stay with the business for a certain amount of time before they can receive the retention bonus.
Let them know that they have to stay with the business until a certain date to receive the bonus. Retention bonuses should be used as part of an overall employee retention strategy.
You also need to consider that offering one will come with a cost. The cost of the retention bonus is either the amount you spend to reward your employees on a one-off basis or the amount you pay in the form of a higher salary to retain the employee longer term.
Take Advantage of This New COVID-19 Employee Retention Credit
It’s important to note that ERTC COVID-19 Relief isn’t a new tax credit per se. It’s a change to the way an existing employee retention tax credit is calculated.
It’s designed to make the tax credit more accessible to more businesses, which means it’s an even more valuable employee retention tool for you. If you’ve been planning to offer a retention bonus to your employees, now could be the best time to do so.
You will be able to get a larger tax credit by offering the retention bonus under COVID-19. You can see if COVID-19 applies to you by first calculating your current tax credit using the current rules.
Bottom line
The Employee Retention Tax Credit Covid 19 Relief for businesses is a new incentive designed to help businesses retain more of their employees. There are many ways to deliver employee retention value to your business clients, including hiring the right people, rewarding them, expressing gratitude, investing in their personal development, and making your workplace a better place to work. If you’ve been planning to offer a retention bonus to your employees, now could be the best time to do so. You may be able to get a larger tax credit by offering the retention bonus under COVID-19.
Learn more at https://go.ampifire.ai/Emergency
