Key Personnel Planning: How to Help Your Essential Employees Thrive

When we start working with a new business – and often when we sit down for our regular reviews with current clients – we go through a simple yet highly effective exercise. We put 10 cards in front of them representing 10 common risks companies face, then we ask them to put them in order based on which are most prevalent to their business today. 

Every company is different, so there’s no right or wrong answer. The exercise simply helps our team align with your priorities. 

But no matter how many companies I meet with, one card is always near the top:

Let’s look at what makes key personnel so important, and why key personnel planning is perpetually top-of-mind for business owners.

What Does ‘Key Personnel’ Mean?

I define it as any people whose departure would have a significant impact on your company’s production or service. In other words, the key producers and key leaders – or as Seth Godin calls them, the linchpins.

Take a minute to imagine the key personnel at your company – the salespeople, managers, leaders, and laborers whose presence makes your company not just functional, but excellent. 

Does the idea of one of them leaving keep you up at night?

Keeping Key Personnel is Hard

We’ve already established that employee retention is difficult, but let’s do a quick roundup of some key figures:

• The average turnover rate for U.S.- and Canada-based companies in 2023 was 17.3%.
• The average employee tenure is 4.1 years.
• Nearly 1 in 2 American employees are actively looking for another job at any given time.
• The majority of job separations are employee- rather than employer-driven. In May 2024, 3.5 million people left their jobs (of 5.4 million total job separations), meaning 65% of the time, people choose to leave their jobs rather than being let go by their employer. 

These are all national averages. The numbers shift the more you zoom in, so you’re not alone if you look at those figures and feel like they’re way off from your company in either direction. For instance, the average turnover rate in the Marketing industry is around 30%, while the construction industry is closer to 20%.

Bear in mind, these averages include employees of all ages. Younger people tend to do a lot more job-hopping as they progress in their careers, so that drives the number up. Key personnel tend to be more established in their careers, so their numbers will likely be a little different – but not as much as you may think. For instance, the average CEO tenure among the largest 1,000 companies in the world is 6.9 years.

Why Key Personnel Leave

Key people leave for a lot of reasons. Some of them are personal, like they suddenly became the primary caretaker of a terminally ill family member. Maybe they burned out and felt like they needed something different. Maybe they chose to move for a spouse’s job or to be near family. Maybe they’re having money problems.

In other cases, maybe your key personnel caught the eye of a competitor and they were wooed away with an offer they couldn’t resist. This is especially common among salespeople since they tend to be among the most outward-facing team members and part of their job function is to attract attention.

The Risks of Losing Key Personnel

Losing key personnel is like removing an essential cog in a machine – everything stops until you find a replacement.

Maybe you miss shipments, maybe you have to delay jobs, or maybe you as the business owner have to stop working on the business and go back to working in the business to cover for their absence. As any owner knows, it takes years of hard work to remove yourself from the day-to-day operations of your company, and once you step back in it can be nearly impossible to get out again.

Not to mention the cost to your company when key people leave. You’re paying to advertise the jobs, spending time interviewing to find the perfect fit, and potentially having to repeat that process over and over. Then you have to onboard the new person, train them, and give them time to flourish – if they are capable of it. And again, you might be starting over in that process multiple times until you find the right fit.

So, rather than repeating that process, how do we get key personnel to stay? In order to answer that question, we first have to understand the unspoken factors that make an employee essential so we can appeal to each one.

4 Internal Motivating Factors of Key Personnel

Key personnel may serve in any role at your organization, but they typically share some, if not all, of these internal motivating factors:

1. They believe in your company’s mission: Key personnel believe deeply in what your company does, so they’re all-in on making sure it’s done right. They understand that difficulties will arise, but they’re not there because it’s easy, they’re there because your company’s mission resonates deeply with them.
2. They understand the big picture: While most employees care primarily about doing their job right, key personnel view their role in the context of the larger organization and, as a result, can address problems before most people.
3. They take ownership: Key personnel see it as their responsibility to make sure their tasks cross the finish line, regardless of obstacles that may cause others to give up.
4. They see when you care: While some employees will never feel appreciated, key personnel can tell when you care – and it makes a world of difference.

And so we get to the big question…

How Can Your Company Keep Key Personnel from Leaving?

In short, culture. Well, culture and benefits. But culture is by far the most important factor.

The Role of Culture

Culture is your best retention tool. No matter how much money, equity, or time off I throw at someone, if they hate working for our company, for their manager or in this industry, they won’t stick around long. 

Just look at the tech world. These companies offer great pay, innovative workplaces, and unique benefits like free food and unlimited time off. Sounds great, right? Yet the three companies with the worst employee tenure are Apple, Amazon, and Meta, in that order, with an average tenure of less than two years. The rest of the top 20 list of worst tenure is dominated by more tech companies like Netflix, Google, Salesforce and Tesla. 

The problem? In my opinion, the culture at tech companies treats employees as disposable and interchangeable – literal cogs in a machine that can be replaced at will. In their rush to release the next big thing, they prize product over people.

On the other end of the spectrum, you have the three companies with the best tenure:

1. ConocoPhillips: 10.6 years
2. Chevron: 9.3 years
3. Union Pacific: 9.3 years

The difference? Among other things, these are established companies that understand that in order to get product right, you have to prioritize people.

Show me a company with great retention rates, and I’ll show you a company that gets culture right – and appeals to their key personnel’s internal motivating factors.

Mission

Independent risk advisory/insurance businesses are rare these days, and the successful ones tend to sell pretty quickly to huge multinational insurance companies. 

At Ellerbrock-Norris, we’ve built our culture around our company’s mission to remain independent, and we serve businesses that share that mission. Why? Because independent, local companies serve local people, creating better local communities.

So how have we remained independent since our founding in 1906? In large part, it comes down to hiring people who believe in our mission of independence and its connection to bettering local communities.

Remember, factor No. 1 of key personnel was that they believe in your mission. If you are lucky like us, that mission is fairly easy to believe in. 

Compare that with companies that put profits at the center of everything they do. Yes, people like money, but if that’s the primary motivating factor, it’s not going to keep the right people at your company for long.

Big Picture

Key personnel care about the big picture – they want to know why their job matters in the operations of the company.

There are several ways to communicate the big picture to your team. Something as simple as an org chart can help people start to get an idea of how they play an important supporting role, but it shouldn’t end there.

Explain how the gears of your company fit together during meetings, company town halls, one-on-one conversations, etc. The more you can integrate the big picture into daily life at your company, the more people will understand how their role supports the company. 

And when people understand that your entire company relies on them fulfilling their role, they feel a greater sense of responsibility and commitment.

Ownership

Ownership is an essential part of retaining key personnel, and you can instill it mostly by what you don’t do. Namely, don’t micromanage. 

According to a study from Monster.com, nearly three-quarters of employees said micromanaging is the “biggest red flag” for a workplace, and 46% said they would leave their job over it. 

When you trust your people to get the job done, you create a more enjoyable, sustainable work environment. You’re not wearing yourself out looking over their shoulders, and you’re not exhausting them with constant criticism.

Care for Them

Your employees can tell if they are valued or not. You may offer the greatest benefits in the world, but if you only care about what your team can do for your company, it will show.

Beyond the conversations you have, the best way to communicate that you care to your key personnel is by offering specialized benefits, such as:

• Personalized financial guidance: You may provide a 401(k) to everyone on your team, that’s not particularly special. But key leaders could get access to a personal financial planner who can help optimize their retirement plan, letting them know that their future matters to you. This can also shed light into what benefits are most important to your key people. 
• Extended leave: If you are concerned about someone leaving due to becoming the primary caretaker for a family member, you could offer extended time off with a guaranteed job when they’re ready to return. You can even extend it to others by creating a sabbatical program.

• Required paid time off: Burnout is a real concern, even with the most dedicated team members. By requiring your key leaders to take time off every year, you let them know that your commitment to them goes beyond the bottom line.

• Vesting schedule: Like I said, key personnel love taking ownership. By offering a vesting schedule with equity, they can literally take ownership, which communicates a great deal of trust – and makes staying much more attractive.

By investing in culture and aligning your company with the internal motivating factors of key personnel, you can be sure your best people will stick around for the long haul.