Why Mid-Market Companies Lose Top Talent—and How Executive Benefit Design Fixes It

When a company reaches 50–500 employees, retention challenges shift from culture and compensation to something more structural: your key people begin getting recruited by firms offering long-term wealth strategies your benefits package can’t match. Salary increases can bridge the gap for a year, maybe two—but not for a decade.

Most mid-market firms don’t lose talent because competitors pay more. They lose them because higher-end companies use executive benefit design to solve what salary can’t: long-term security, tax efficiency, and meaningful retention value. The good news? These strategies have become accessible, affordable, and easier than ever for privately held businesses to implement.

For CEOs and CFOs, the core question becomes simple: What’s the cost of losing your best leaders compared to the cost of retaining them?

The Real Retention Gap Is Wealth Planning, Not W-2 Pay

High performers—especially those earning $150,000+—care about:

• Long-term tax-advantaged wealth accumulation
• Income replacement plans tied to performance
• Protection of their families
• A clear path to retirement income
• A reason to stay for the next 5–10 years

If your benefits package can’t support those needs, someone else’s will.

This is where executive benefit design comes in.

Three Solutions Mid-Market Firms Use to Retain Key Leaders

• Supplemental Executive Retirement Plans (SERPs)
  Provide long-term income tied to performance and retention without increasing W-2 compensation.
• Key-Person Insurance & Business Continuity Planning
  Protects the company from the financial impact of losing a top executive—and can be paired with personal benefits for the executive.
• Executive Bonus or Split-Dollar Plans
  Offer tax-advantaged wealth accumulation, controlled vesting, and high retention value with minimal corporate friction and no ownership dilution.

Each solution aligns the interests of ownership and leadership while strengthening retention and improving financial stability.

The ROI of Stability

Replacing a key executive can easily cost 150–300% of their annual compensation. A well-structured benefit plan often costs a fraction of that while delivering:

• Stronger balance sheet protection
• Increased loyalty and performance
• Competitive differentiation
• Predictable long-term planning

For many companies, it is the difference between scaling smoothly and constantly rebuilding leadership.

Final Thoughts

Mid-market firms win when they design benefits that match the caliber of their people. If you want to attract, retain, and protect your executive team, these strategies can provide the edge.

If you’d like a tailored analysis for your leadership team, you can schedule a brief conversation with our team by clicking the button below.