Why Is It Important?
Competition for talent remains elevated across job positions, and in many cases wage hikes have not been enough to retain valuable employees. The costs to re-hire and re-train employees have been difficult to manage, particularly amid high inflation, supply chain shortages and other economic challenges. The Short-Term Incentive and Retention Program for Employees is designed for cooperatives looking for a way to bolster their recruiting, retention and reward programs.
People are at the heart of every cooperative and want to be part of an organization that values their hard work. This program can help your cooperative stand out in a crowded labor market and retain employees across job roles and compensation levels, including in-demand positions such as lineworkers. The program allows cooperatives (i) to offer structured incentive bonuses that have the potential to grow over time and (ii) to provide financial planning support from an investment advisor that was created by NRECA to provide financial services to cooperatives and their employees — Homestead Advisers.
Our Role
Homestead Advisers can help support your mission by providing a range of programs to serve the needs of the cooperative and its employees.
Homestead Funds has the account types, investments, and guidance to help foster the long-term success of your cooperative. When you open an account with Homestead Funds, you choose how to invest across our family of mutual funds according to your cooperative’s tolerance for risk and expected time horizon. Investing poses risks, including the risk of loss, but it provides the opportunity to earn a return above what is typically available on stable-value funding vehicles.
Short-Term Retention and Incentive awards are held in one Homestead Funds account per employee. Each account is registered to the cooperative, for the benefit of the employee. When the bonus award vests, the shares of the Fund or Funds in the account are distributed to the cooperative, which then pays the employee. Employees may also establish their own Homestead Funds account to which the award can be transferred upon vesting.
A quarterly Homestead Funds account statement is provided to both the cooperative and the employee, which can serve as an ongoing reminder of the award that is waiting for them or the amount potentially left on the table if they were to leave the cooperative.
Learn About the Program and Hear What Co-op CEOs Are Saying
Mark Santero, the CEO of Homestead Advisers, details the Homestead Advisers’ innovative Short-Term Incentive and Retention Program and speaks with electric cooperative CEOs who have implemented the Program at their cooperatives. Discover how these leaders are tackling workforce challenges head-on.
Don’t have time to watch the full video? Click here to watch the individual segments.
Establishing a Short-Term Retention and Incentive Program
- Contact your Regional Relationship Manager for guidance in structuring a program to help meet your cooperative’s workforce needs.
- Identify sources of funding.
- Obtain any necessary approvals from your board of directors (if required).
- Use Homestead Advisers sample documents and forms to implement the program.
- Homestead Funds accounts are established in the Daily Income Fund using the Short-Term Incentive Retention Program for Employees Application. If you have multiple employees in the program, talk to your Regional Relationship Manager about ways to streamline the account setup process.
- Identify the Authorized Representatives to act on the Homestead Funds accounts using the Authorized Cooperative/Employer Representative Form.
- Fund accounts using our payroll instructions below in Related Resources.
Once program details are determined, we recommend that cooperatives review them with their legal counsel and tax advisors, as Homestead Funds does not offer legal or tax advice. In our experience, it takes approximately two to three months to implement the program.
As a money market fund, the Daily Income Fund has limited potential for income production. You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Fund is not a bank account and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s sponsor is not required to reimburse the Fund for losses, and you should not expect that the sponsor will provide financial support to the Fund at any time, including during periods of market stress.
Co-op Success Stories
Hear real success stories from co-ops across the country and learn how this flexible program is helping electric cooperatives attract, retain and reward valuable employees.
Mr. Kelton discusses how the program helped retain valuable employees in their fiber business and addresses challenges in keeping linemen competitive with investor-owned utilities.
Mr. Capps explains how his cooperative implemented both a retention program for senior leadership and an employee-sponsored savings program, fostering financial wellness among all employees.
Mr. Hallowell shares how the program allowed them to increase compensation for linemen while managing pension costs, providing a creative solution to their workforce challenges.
Mr. Bagley describes his cooperative’s approach of combining financial wellness seminars with contributions to employee investment accounts, promoting both personal and cooperative financial literacy.
The testimonials/endorsements in the videos are provided on behalf of Cooperatives that are members of the NRECA system. It is provided for illustrative and educational purposes only and may not be representative of the experience of others receiving similar services. It is not intended to suggest or guarantee that any client’s investment objectives or goals will be met.
Important note: A Short-Term Incentive Retention Program invested in Homestead Funds is not a qualified plan and has no relation to any retirement plans that may be offered by the cooperative.
For sample Short-Term Incentive and Retention Program for Employees documents, call us at 800.258.3030, option 3.
Related Resources
- Homestead Advisers Short-Term Incentive and Retention Program for Employees Brochure
- Homestead Funds Authorized Cooperative/Employer Representative Form
- Homestead Funds Short-Term Incentive and Retention Program for Employees Application
- Homestead Funds Employer Instructions to Submit Funds
- Homestead Funds Group Purchase Form
Your Regional Relationship Manager can assist you with the process to open the account.
Brian Allen
NATIONAL RELATIONSHIP MANAGER; INVESTMENT ADVISOR REPRESENTATIVE; AND REGISTERED REPRESENTATIVE
Mark Edwards
REGIONAL RELATIONSHIP MANAGER; INVESTMENT ADVISOR REPRESENTATIVE; AND REGISTERED REPRESENTATIVE
Stephanie Mills
REGIONAL RELATIONSHIP MANAGER; INVESTMENT ADVISOR REPRESENTATIVE; AND REGISTERED REPRESENTATIVE
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