A growing number of employees are taking advantage of staff share schemes to invest in the organisations they work for and to build upon their savings.
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- Share scheme communications should be focused, clear and accessible.
- Signposts can be used to direct employees towards a range of information sources.
- Continuous communications can help to drive engagement with share schemes throughout the year.
Employees in the UK saved £40 million more through staff share schemes in 2014 than in 2013, according to the IFS Proshare Sharesave (SAYE) and share incentive plan (Sip) survey. However, the rewards that share schemes can provide are not purely financial, nor are they enjoyed by staff alone.
A study conducted by the National Institute of Economic and Social Research (NIESR) and the London School of Economics, and commissioned by Computershare, found that 75% of share scheme members are satisfied with their jobs compared with 65% of non-members. The Computershare Share plan survey results 2014, which surveyed more than 3,800 Computershare employees, also found that members of the scheme take less unplanned absence, are likely to put in more hours and feel a greater sense of loyalty to the firm.
However, if both employers and staff are to gain the maximum benefits that share schemes have to offer, then employee engagement is vital.
1. Empower staff to make an informed decision
Engagement with share schemes, as with any benefit, cannot be built upon until a solid foundation of understanding has been laid. Employers can provide details of the share schemes available to staff and demonstrate how these schemes fit into the complete benefits package. Phil Ainsley, managing director of employee services at Equiniti, says: “Corporates understand how much of a concern financial [matters] can be to employees, so the more they can help them to manage their finances effectively, the more engaged and the more fit for work they’ll be.”
Employers are in a position to help staff access resources about how share schemes work, whether it be through financial education programmes or by signposting the way to independent organisations and government sites. This enables employees to gather as much, or as little, information as and when best suits their current needs. Such resources also allow employers to support their staff in making the decision that is right for them, while avoiding the potential pitfalls surrounding the administration of financial advice.
2. Clear and appealing messaging
Gabbi Stopp, head of employee share ownership at IFS Proshare, cites share scheme complexity as one of the major challenges in boosting staff engagement, particularly when it comes to tax. “People tend to get a bit scared when you mention the word tax, so breaking down the myths and breaking down the fear factor is really important,” she says.
Scaling back the use of overly technical language can increase the accessibility of share scheme communications, while providing greater clarity around the complexities surrounding the different types of schemes and how they function.
When devising communications, employers should remain focused on the main messages they want to impart to staff and what action they want to derive from these. This can be supported by thinking about the timing and delivery of the message. Stopp points to research in the field of behavioural economics, which has found that employees are more likely to read and take action off the back of messages delivered at certain times of the week than others.
Martyn Drake, managing director at Computershare Plan Managers, adds that the design of communications can also have an impact on engagement. For example, a simple, eye-catching design that stands out from the employer’s usual branding can enhance readership rates and help to create a buzz around the message.
3. A comprehensive communications strategy
By utilising a range of communication channels, employers can target the full spectrum of their workforce. Digital platforms, such as intranets, websites, email and social media, can provide staff with quick and easy access to information. However, these should be interwoven with more traditional methods of communication in order to provide a comprehensive communications strategy that appeals to all staff members regardless of how familiar with digital platforms they are.
Face-to-face interaction remains an important element in boosting engagement, whether this takes the form of staff focus groups, presentations or workplace champions. “People react to people much better than they do to disembodied messages,” explains Equiniti’s Ainsley.
Of course, behind these interactions must stand a clear message, so that any information passed on is accurate and consistent across the workforce.
4. A continuous approach
Solely highlighting an employee share scheme at the point of launch or sign-up is unlikely to result in high levels of engagement. A continuous communications strategy ensures that share schemes remain in the minds of employees throughout the year. This could include scheduling news items and identifying awareness opportunities around relevant events, such as the announcement of financial results, or sharing individual employee case studies on social media.
This continuous approach should sit against a backdrop of a culture of engagement. Ruth Wooffindin, associate at the RM2 Partnership, says: “People will be engaged in a share scheme, take it up and stay engaged with it, when they are engaged with the [organisation].”
Consistently striving to engage staff with all of the benefits available to them could help drive the level of commitment they feel towards the organisation they work for, as well as providing a clearer sense of how share schemes add to benefits package.
Viewpoint: Share schemes boost savings and productivity
Owning shares in the company they work for gives employees an extra stake, and when their company performs well they benefit too. Share plans work best as part of a full programme of employee engagement. As well as dividends and probably capital gains, employee shareholders can vote and the [Employee Share Ownership (Esop)] Centre is working closely with the UK Shareholders’ Association to make it more easily possible.
Recently, both the Chancellor of the Exchequer, George Osborne, and the business secretary, Sajid Javid, have attributed the share price performance of Royal Mail to the efforts of its 135,000 employee owners. By way of thanks, the government gave employees an extra £50m of stock.
Last year, a joint London School of Economics and National Institute of Economic and Social Research (NIESR) study, S hare plan survey results 2014 , provided strong evidence of the positive effects of employee share ownership for employees and employers. The study surveyed the employees of Computershare in nine countries and found that, compared with non-members, people who were in the company’s employee share plan identified more with the company; worked beyond their contractual hours; had lower levels of absence; and were less likely to look for a job with another organisation. This suggests an association between thinking like a shareholder and the approach to work that creates higher productivity.
The tumultuous economic times of recent years have put some employees off share plans. Employers should not give up since contributing to a plan is usually a favourable or one-way bet. In the case of a sharesave scheme, if the share price goes up employees gain; if it falls they get their savings back with interest.
There’s a risk that employee share plans become too normal; no more than a corporate accessory. Part of the Esop Centre’s role is to keep the idea fresh and to remind everybody that employee share ownership for the millions, instigated by companies that share the benefit, are an idea worth getting excited about. Published quarterly, our Esop Index, FTSE calculated, shows just how much better companies perform when employees have a financial stake.
Malcolm Hurlston CBE is chairman of the Employee Share Ownership (Esop) Centre
Case Study: Royal Mail takes a multi-channel approach to employee communication
Royal Mail has engaged in a broad spectrum of communication channels to ensure that its 143,000 employees are well informed about the share schemes available to them, a strategy that helped the organisation to win the ‘Best employee share schemes’ category at the Employee Benefits Awards 2015.
Royal Mail offers two share schemes: free shares under a share incentive plan (Sip), with the first allocation in October 2013 at the time of the group’s initial public offering (IPO) and a second in April 2014, as well as a sharesave scheme that launched later in 2014.
Despite being a relatively new benefit, in the group’s latest annual employee survey, 64% said they felt committed to making the organisation successful as a member of Royal Mail’s share scheme. Approximately 93% of employees are shareholders.
In preparation for the IPO and share scheme roll-out, Royal Mail embarked on a communications strategy that would reach all employees, mindful that a large proportion of staff were not digitally connected at work. Ian Dockerill, employee shares manager at Royal Mail, says: “With the brilliant support of Equiniti, we went out to 107 sites in a three-week period [between the IPO being announced and coming into effect]. We think we handled almost 10,000 questions through that process. Of course, a lot of the 107 sites are 24-hour operations so we had to make sure we covered three shifts as well.”
The employer also harnessed the power of Royal Mail TV, with news items about the schemes regularly broadcast on televisions at Royal Mail’s operational sites across the country. Nick Hewer, from BBC One’s The Apprentice , starred in two videos on the topic, and a third video was produced for the launch of the sharesave scheme. These provided an element of financial education, and were complemented by other communication methods, such as a cartoon-style booklet mailed directly to employees’ homes.
Following its initial success, the organisation is now working to ensure that this momentum continues. “One, to get new joiners involved; and two, to keep the message fresh and to keep a regular drumbeat of messaging around shareholding […] so that we keep that good feeling about being a shareholder going,” Dockerill explains.