All permanent staff at Elk the Label have received their first payments from a 20% pool of the brand’s annual net profits.
The payments were made last year following the initial launch of the scheme in August 2021.
For each of the team members, this represented more than 10% of their base salary, with permanent staff making up 63% of the business across a total of 84 - with casuals making up 37%.
Speaking with Ragtrader, Elk co-founder and creative director Marnie Goding said the Elk Incentive Plan (EIP) is equitably distributed across every single member of its permanent team.
“This is not something most of our employees have ever been a part of,” Goding said. “They are without exception appreciative of the transparency we provide and the recognition of their contribution by way of financial return.
“It has helped to translate our results and performance in a more personal way with individuals deeply understanding how they impact outcomes including managing expenses.
“From junior through to senior team members it creates a mutual understanding that we are all involved in influencing the results. Particularly in the current economic climate where interest rates and rising costs are putting significant pressures on household budgets, these additional payments have been welcomed by all.”
As part of the incentive scheme, all of Elk’s staff are kept across the company's financial performance through quarterly updates. Goding said while all permanent employees have a very real understanding of the company’s finances, she and the leadership team are careful not to shift service style.
“Whilst we strive for better financial results, we know it would be short-sighted to push a strong commercial sales tactic, preferring the longer game of nurturing and servicing our customers for a longer relationship.”
Looking ahead, Goding said she doesn't expect any changes in the short term, regardless of its end of financial year results.
“The team know that they (like us as owners) share in the benefits of a positive result but if the year does not perform then there is nothing to distribute," she said. "This is the reality of business and brings everyone closer to understanding this.”
The profit-sharing scheme joins other employee growth and retention initiatives, including a recent updating of its policies around flexible working arrangements to match the post-COVID era. As a result of these initiatives, Elk recorded an 83% retention rate across its entire permanent team in 2023.
Goding believes the EIP and the new flexible work policy also improved productivity and connectivity across the business.
“I think what we have seen is a deeper “buy in” to the business with team members really owning and taking on a greater responsibility for their area which naturally improves productivity,” she said.
“We have also seen a positive shift in effective decision-making as team members are collectively empowered to make better, informed decisions.”