In new survey results based on feedback from 158 managers considering a profit-sharing program for their employees, a common motivation for the decision is apparent with 48% of respondents indicating the goal of retaining their long-term employees.
Of those indicating the desire to retain employees as a motivating factor, there are a few other breakdowns to note:
▶️ 54% of these companies are LLCs.
▶️ 35% of these companies are S Corps.
Also in this group, they all report only wanting to offer profit sharing to a small portion of their team.
Usually 50% or fewer employees.
Interestingly, the larger organizations offer profit sharing to the lowest percentage of their total employees. In fact, the two companies with over 100 employees both plan to only offer profit sharing to 2-5 employees.
That is the most popular response to the number of employees to include (2-5), but in most cases the organizations have much smaller teams.
All of this indicates that profit sharing is used mostly to retain only those employees whose loss would be felt the most.
