Replay webinar — USAFrance Financial Group™ | Olivier Sureau, CPA® & Adrien Eyraud
A talent that leaves is a cheque signed in favour of the competition. And in the United States, this cheque is colossal: replacing a senior profile costs an average of three times his or her annual salary — recruitment, training, loss of productivity, impact on teams. Even a junior profile represents a third of his annual salary.
However, most French companies established in the United States underuse the tools available. Not because of a lack of resources, but because of a lack of knowledge. Because the best retention plans aren't just for Fortune 500 companies — they're available to any SMB, often at a low relative cost, and structured to take potential tax considerations into account.
Here's how to set them up.
Understanding Why Americans Are Leaving
Before talking about tools, it is necessary to understand the psychology of the American labor market — which differs profoundly from the French market.
Remuneration is the first criterion, far ahead of everything else. An American employee who receives an offer 15% more will not stay out of loyalty or attachment to the company. He will leave. It's cultural, assumed, and perfectly rational in such a competitive market.
Then there are career prospects, corporate culture, and a factor often overlooked by French executives: the title. Being Vice President is a strong social recognition in the United States. It matters at dinners, on LinkedIn, in the way the person presents themselves. Not offering the right title can be enough to lose a talent to a competitor who pays attention to it.
Finally, a return to basics: the average retention period for an executive in the United States is 4 years. If you don't actively build a reason to stay, your talents will leave.
The fundamentals: what you should offer at least
Some benefits are not differentiators — they are expected. Not to propose them is already to lose the battle.
Health insurance is essential. In the United States, an employee relies on his employer for his medical coverage much more than he would in France.
Disability coverage is often neglected by French companies, which see it as a luxury. This is a mistake: 60% of American employees consider them to be a decisive criterion in choosing an employer.
- Short-Term Disability covers income for the first 90 days in the event of incapacity for work. Offered by 57% of employers, it costs very little with a group subscription.
- Long-Term Disability takes over for permanent disabilities, covering 50 to 70% of income until retirement. For the employer, it also has a practical advantage: once the employee has been covered by the insurance, you can recruit his replacement without maintaining his salary.
Group Life Insurance is offered by 72% of U.S. employers. This is the absolute minimum. Not offering it means being below the market.
Paid vacations: contrary to popular belief, Americans want vacations. There are no mandatory statutory leaves of absence in the United States, but in practice, employees with a few years of seniority are entitled to 4 to 5 weeks per year. It's an expectation, not a bonus.
Qualified pension plans: an underused retention tool
Qualified plans — 401(k), Safe Harbor, Profit Sharing, Cash Balance Plan — are subject to IRS rules and must be offered to all employees without discrimination. They may offer potentially valuable tax considerations, which many French companies miss out on. As with any plan involving tax treatment, the specific rules and figures below should be confirmed with a qualified tax advisor or plan administrator, since they are subject to change.
The general principle: contributions are generally made on a pre-tax basis for the employee (for example, an employee earning $50,000 who contributes $10,000 to a 401(k) would typically be taxed only on $40,000 of income), and may be deductible for the employer. Growth within the plan is generally tax-deferred during the accumulation phase. These figures and tax treatments are illustrative and subject to IRS rules in effect at a given time; current thresholds should always be verified.
For companies that open a plan for the first time, certain federal tax credits may be available, subject to eligibility requirements and current IRS limits:
- Potentially up to $5,000/year for the first 3 years toward management fees in certain cases (up to 100% in the first year, depending on eligibility) — figures should be confirmed against current IRS guidance
- A potential additional credit of up to $500 per registered employee, subject to eligibility
- A potential employer matching tax credit of up to $1,000 per employee per year, subject to eligibility
In addition, employer and employee contributions to these plans may, in certain cases, be exempt from FICA social security contributions — a consideration that is often overlooked, though it should be confirmed with a tax advisor based on plan structure.
The three main tools:
The 401(k) Safe Harbor is the recommended plan for employee businesses. It avoids non-discrimination tests by opting for automatic matching. There are two formulas: pay 3% of the salary of all employees automatically (non-elective), or match 100% of the employee's contribution up to 3% of the salary and then 50% up to 5%.
Profit Sharing allows you to pay an annual bonus integrated into the retirement plan, with the possibility of allocating more to higher incomes — within an overall annual contribution limit set by the IRS (employee + employer contributions), which is subject to change and should be verified for the current year.
The Cash Balance Plan allows you to go beyond this limit. Depending on age and plan design, an executive may be able to make additional tax-deductible contributions, with the potential amount generally increasing with age. Combined with a 401(k) and Profit Sharing, total tax-deductible contributions for higher-income business owners can, in some cases, be substantial — actual figures vary by individual circumstances, current IRS limits, and plan design, and should be modeled with a qualified plan actuary or tax advisor.
The nonqualified plans: the real "golden handcuffs"
This is where differentiation really happens. And it's precisely what most French companies aren't doing yet.
The numbers speak for themselves. Executive participation in NQDC plans has climbed to a record high — 70% of eligible executives now participate, up sharply from 61.2% just a year earlier, according to the Plan Sponsor Council of America (PSCA), an independent nonprofit research body — not a vendor selling these plans. More than three-fourths of employers (77.3%) actively contribute to their employees' NQDC accounts, most commonly through a "restoration match" that makes up for what's lost to 401(k) contribution limits. And this isn't just about savings: nearly 30% of plans include a non-compete provision that forfeits the benefit entirely if the employee leaves for a competitor — proof that these plans are built as much for retention as for retirement.
Unlike qualified plans, nonqualified plans offer complete freedom: you choose who gets one, there's no contribution limit, no anti-discrimination rule, and you can build in exactly that kind of non-compete condition — particularly useful in a context where traditional non-compete clauses are often unenforceable in the United States.
The SERP (Supplemental Executive Retirement Plan) is the best known. The principle: you make a promise to your key employee. "If you finish your career here, you'll continue receiving the equivalent of your last salary for 10 to 15 years after you retire." For the employee, this is exceptional: the first years of retirement — the ones you actually want to enjoy — are funded without touching accumulated capital. For the employer, it's a powerful reason for that person to never leave. The condition: stay until the agreed term. Leave early, and you lose everything. Leave for a competitor afterward, and you lose everything too.
Phantom stocks give the employee the feeling of being an investor in the company — something Americans deeply crave. Virtual shares are created with a reference valuation. At the end of the vesting period (5 or 10 years), the employee can "sell" these shares at their current value. No dilution of ownership, no legal complexity, but strong alignment between the employee and the company's success. As an illustration of how aligned incentives drive retention: while average operator turnover in fast food hovers around 35%, it falls below 5% a year at Chick-fil-A, thanks to a model that makes franchisees true financial partners in their restaurant's success (via a 50% profit-share arrangement rather than phantom stock specifically)
Sources : https://www.psca.org/news/psca-news/2026/2/nqdc-plan-participation-climbs-to-a-record-high/ https://www.bls.gov/ebs/
Financing these promises: COLI
A promise of deferred payment implies having the funds available when the time comes. The recommended tool: COLI (Corporate-Owned Life Insurance), a life insurance policy taken out by the company on the lives of its key employees.
How it works: the company pays premiums, the policy's cash value may grow on a tax-deferred basis during the accumulation phase, and the funds are intended to be available to honor commitments at the agreed time. After the employee's death — even long after retirement — the company receives the death benefit, which can help offset the costs incurred over time. The tax treatment of COLI is subject to specific IRS rules (including notice and consent requirements) and should be reviewed with a tax and legal advisor before implementation.
It is for this reason that many large U.S. companies use COLI to help fund their unqualified plans. It can be a predictable financing tool, though its tax treatment depends on plan design and should be evaluated case by case with qualified advisors.
The pyramid of tools to consider
From the most basic to the most differentiating:
Level 1 — The minimum expected: health insurance, short- and long-term disability coverage, group life insurance, competitive leave.
Level 2 — Optimized compensation: salary aligned with the market, bonuses, regular increases, adapted title.
Level 3 — Qualified plans: 401(k) Safe Harbor, Profit Sharing, and if relevant, Cash Balance Plan. Potential tax considerations, and often a low net cost of implementation in the first year.
Level 4 — Unskilled Blueprints: SERP, Phantom Stocks. This is what makes the difference in the long term and what turns your talents into long-term partners.
One last point: financial education
The best tools in the world are useless if your employees don't understand them. Studies regularly show that employees of large companies are unaware of the advantages they have in their hands — no one has explained them to them.
Communicating, training, explaining the mechanisms: this is an integral part of the retention strategy. An employee who understands the value of their package stays. An employee who doesn't see it leaves for 5% more elsewhere.
Future written communications may be in English only. This material is provided for educational and informational purposes only and is not intended as tax, legal, accounting, employee benefits, retirement plan, insurance, investment, or human resources advice. The information discussed is general in nature and may not be appropriate for all businesses or individuals. References to employee benefit programs, retirement plans, executive compensation arrangements, insurance products, tax strategies, and business planning concepts are for illustrative purposes only and should not be construed as a recommendation or solicitation to implement any specific strategy or product. Tax laws, IRS contribution limits, eligibility requirements, and plan rules are subject to change and may vary based on individual circumstances. Businesses should consult with their own qualified legal, tax, accounting, employee benefits, and financial professionals before implementing any retirement plan, executive compensation arrangement, insurance solution, or employee retention strategy. Corporate-owned life insurance (COLI), supplemental executive retirement plans (SERPs), phantom stock plans, and other nonqualified compensation arrangements involve legal, tax, financial, and compliance considerations. Suitability, tax treatment, and implementation requirements vary by employer and should be reviewed with qualified legal, tax, and financial professionals before adoption. 8960666.1