Retaining the right people

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Recruiting great team members is no easy task, however, if you manage to find the right person the next step is to ensure you keep them.

Of course, a stable and content workforce is key to any workplace performing well and retaining staff, but good contractual documentation can offer further comfort and mechanisms to keep the employees fully engaged.  

So with this in mind, what can be done to protect the business?

Once the employee is identified, the employer can make an offer of employment and structure the employee's arrangements in a way that helps to retain the employee and mitigates against difficulties if the employee chooses to leave. Some of the things to think about are:

Share Options - often employees are looking for more than cash and depending on the size of the employer it may not have the financial resources to pay the salary that the employee could get from a larger organisation. In these circumstances, share options are often used.  Share options are typically rights for an individual to purchase shares in a company at a set price at a future date. Structured correctly share options have a host of advantages, including, recruiting, retaining and motivating employees, improving staff performance, nurturing employee loyalty, supplementing low salaries, replacing cash bonuses, utilising tax breaks, reducing employment costs, aligning interests of staff and employees, alleviating cash flow issues and exit planning.

Notice period - there is no prohibition on the length of notice that an employer and employee can agree, provided it reflects the statutory minimums. The length of notice can be an effective deterrent to an employee moving on quickly.

Training costs - it's always open to employers to agree that training costs incurred can be repaid if an employee leaves in a certain period of time, but usually it is best to tread carefully and to operate repayment on a sliding scale, to give such provisions the best chance of being enforceable.

Post-termination restrictions - it's always open to an employer to agree with an employee that they won't take various steps, post-employment, that could be damaging to the employer for a specified period of time, for example, it may be appropriate to prevent the employee competing with the business for a period of time after they leave.

Paying in arrears - a practical step to take can also be to pay salary/wages and allowances in sufficient arrears to provide a little protection against the prospect of employees leaving without giving appropriate notice; well worded contractual documentation may allow employers to legitimately offset those monies against the problems caused by people who leave without observing appropriate notice periods.

As such, once the work has been done to find the right employee, ensure you have the correct documentation in place to protect your investment and keep the employee with the business and performing well.


Jo specialises in high growth companies and investment arrangements.  Working with investors and entrepreneurs she has particular skill advising on incorporation, share options, angel finance, crowdfunding, venture capital financing and exit.  She works extensively with Scottish companies throughout their life cycle - from inception of the idea to exit.  Jo plays a key role with the firm’s support of Entrepreneurial Spark and Scottish EDGE. 

If you need assistance with employment contracts or employee share options please contact get in touch with Jo Nisbet on