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Chris Buttenham, CEO of Reins and author of “Alternative Equity,” argues that retention is not just a culture or HR challenge. It is an exit-readiness issue that can either strengthen or weaken a company’s valuation. In this Q&A, he explains why raises alone rarely build loyalty and how tools like profit sharing and phantom stock can help owners keep key leaders while protecting cash flow.
Why do you believe retention is one of the biggest threats to stability in the lawn and landscape industry right now?
Landscaping is relationship-driven and execution-heavy. When you lose key foremen, account managers or crew leaders, you don’t just lose labor. You lose customer relationships, operational consistency and institutional knowledge. In a tight labor market, replacing that talent is expensive and disruptive. High turnover creates instability in service quality, culture and profitability. Retention is not just an HR issue in this industry. It is an operational risk.
When you look at a landscape company that struggles with turnover, what are the most common root causes you see beyond pay?
Beyond pay, the most common issues are lack of career path, unclear leadership structure and limited connection between performance and reward. Many employees do not see what the next five years look like for them. They may feel capped. Others do not feel trusted with responsibility or included in bigger-picture decisions. When people cannot see growth, ownership or recognition tied to results, they eventually look elsewhere.
You’ve said retention is really an “exit-readiness” issue. What do buyers or investors look for when evaluating the strength of a company’s team?
Buyers look for durability. They want to see that the business runs on systems and leadership, not personality. That means a second layer of management, low turnover among key roles, documented processes and incentive structures that keep top people in place post-transaction. If the owner is still the primary rainmaker, problem solver and culture carrier, that is a risk. A strong, aligned leadership team directly increases valuation.
Many owners assume retention means giving raises. Why do raises often fail to create long-term loyalty in this industry?
Raises solve short-term satisfaction, not long-term alignment. They quickly become the new baseline. If compensation is only tied to hourly wage or salary, employees think like employees. Loyalty increases when people see a future with the company, feel trusted with responsibility and benefit when the company grows. Without that connection, a slightly higher offer down the street can undo years of tenure.
How can incentive plans be structured in a way that rewards performance and tenure without putting financial strain on the business?
The key is tying rewards to measurable outcomes and long-term value creation. That might include structured profit sharing tied to company performance, milestone-based bonuses for hitting margin or revenue targets or long-term incentive plans that vest over time. When incentives are funded by growth or profitability, they are self-sustaining. Owners are not writing checks out of existing margins. They are sharing upside that would not exist without strong performance.
What is phantom stock, and why is it appealing for service businesses like landscaping where owners want to keep control?
Phantom stock is a contractual promise to pay an employee a cash bonus in the future based on the company’s value. It mirrors the economics of equity without transferring actual ownership. The employee does not receive voting rights or control. For service businesses, this is powerful because owners can align key leaders with long-term company value while keeping full operational and legal control. It creates an ownership mindset without restructuring the business.
For an owner who is not planning to sell anytime soon, why is it still smart to operate like an exit could happen in the future?
Operating with exit readiness in mind forces discipline. You build systems, develop leaders, clean up financials and reduce dependency on yourself. Even if you never sell, you gain freedom. The business becomes less fragile and less reliant on your daily involvement. And if market conditions or personal circumstances change, you are prepared. Optionality is valuable.
What are a few early warning signs that a landscape business is too dependent on the owner and not building a strong leadership bench?
If every major decision routes through the owner, that is a sign. If key customer relationships exist only with the owner, that is another. If financial performance drops when the owner is away for a week, that is telling. If emerging leaders have titles but not real authority, that is a red flag. A resilient business has distributed responsibility, financial transparency among leaders and incentives that keep top people committed to long-term success.
