Employee Retention Scheme
In certain businesses talented and efficient Employees are the basic necessity of the Employer. In such industries to find good employee is a big problem and their retention is even a bigger problem.
Talented officials change jobs very often. When a talented employee leaves, the organization suffers for a while till they get a suitable replacement.
Employers wish to retain the talented employees to insure growth of business without interruption and more importantly for their peace of mind.
Some of the typical examples of Industries/Individuals which are affected due to talented employees leaving them:
IT Professionals of Software Industry
Pharma Industry including Super Speciality
R & D Industry
Jewellery Makers. Etc
Why Organisations affected due to leaving of Talented man-power?
Due to dependency of organization/employer on skills and knowledge of the employee.
Employer feels the Need of such talented person to complete the Project or R & D work or to insure profitability.
Increasing the salary is temporary solution, as after gaining experience every employee gets better job offers from same industry. So fear always remains in the mind of employer about employees leaving the job and joining competitors or even starting their own business.
In such type of businesses employer wish that employees remain with them for longer period say 10 to 15 years. But question arises whether employee will be ready for that. One of the solutions is if employer offers good lump sum amount apart from regular employment benefits payable, then chances of employee agreeing to work for longer duration are more. Almost 95% of people have their own selling price in mind.
In such cases employer will make an agreement with employee through employment contract. In this agreement he expects the following things:
A longer tenure of service from employee.
To pay a good sum/annuity to employee at the end of the tenure rather than during his tenure in the job.
If employee fails to complete the tenure, then employer should not make any additional payment.
The payment at the end of the tenure is always conditional, which may tempt the employee to complete the tenure of service as per contract. By this employer is assured of services of the employee for specified period and Employee is assured of additional lump sum amount/annuity for binding himself to work with company for specified period.
But employee also expects following things:
Guarantee of the money to be paid after specified period, without going in for any litigation if employer fails to pay the amount.
Protection for family in event of his/her death during the contract period.
LIC policy on the life of employee under Employer- Employee Scheme will provide the necessary solution to above expectations of both employer and employee. Conditional assignment of policy will provide the necessary solution. If employee serves for the term, he will get the maturity amount (which will be as per agreement amount) and in case of his early death his family will get the death claim amount. In case employee resigns in between policy will revert to employer.