Role for share plans to help UK employees ‘feel valued’ amid talent war

In the war for talent the evidence is clear – flexibility,  in terms of hours and location, is the benefit most valued by employees and is a top priority for most employers. But most flexible working benefits are designed for office workers, not home and hybrid workers, so how do you address that issue?

It’s a good question and one asked by Personnel Today in ‘How to compete on flexible benefits for non-office workers’. They highlight how in the past three years life for many office workers has changed almost beyond recognition. The pandemic sparked the introduction of greater flexibility, and many office workers are now able to work from home and adapt their working hours around personal commitments. However, despite the majority of flexible working benefits being designed for office workers, government statistics show that three-quarters of the UK workforce do not work in office-based roles. Although research shows that 67% of businesses acknowledge flexibility as an important benefit to attract and retain talent, the same type of flexibility cannot always be offered to non-office workers.

The article goes on to make the point that for workers in both office and non-office roles want to feel valued and appreciated and one way to achieve that is to tailor benefits to their individual needs and circumstances. They say: ‘Ultimately, businesses that employ non-office workers need to communicate more effectively with employees to pinpoint exactly what would make them feel happy and valued in the workplace. With this understanding, employers can then begin to build a tailored benefits package that works for both the business and its employees – enhancing the employee experience without having a significant impact on costs or productivity.’

So what’s the answer? So, if we take flexible and hybrid working as a given, what else could the package include? One option that is proving popular with a number of our clients is a share plan, so let’s hear more about how that might work. Lynette Jacobs heads up our share plans team and earlier she joined me by video-link from Manchester to discuss it. So, how can share plans make employees feel engaged and valued? I put that to Lynette:

Lynette Jacobs: “For the majority of companies, employees will not be based in their offices full-time, some will be there 50% of their working week, some may be there for an even smaller part of their working week and, therefore, if you're sitting at home at your own desk, in your own office, the fact that you have shares in your company share plan will make you feel part of that company far more. You need to have ways to make your employees feel part of the group, albeit that they're not physically in the office, and just having the share plan and offering it to the employees, again, that's sort of a step in the right direction but what you need to do more, so it has the full impact, is to communicate those plans well to the employees so they understand the potential benefits to them of participating in them whilst, of course, not overselling, keeping away from any financial advice. Then if the employees are participating in the plans, don't only talk about the plans at the time there's a launch, but continually refer to them. So, if you can say what the share price is, from time to time, so that they can see that, all being well, the share price is going up and their value of their reward is going up. If there are performance conditions they need to meet, let's make it easy for them to understand the extent to which those performance conditions are being met as the award progresses throughout its life.”
Joe Glavina: “Ideally, you want a benefits package that has the flexibility to let employees pick and choose their own portfolio. Can share plans be tailored in that way?”

Lynette Jacobs: “It probably depends on the type of plan, I’d say, Joe. So, if you have one of the tax-advantaged all-employee share plans, the company has to offer it to all employees who meet certain requirements. So, generally, as long as they haven’t worked there for more than five years, they have to be offered the opportunity and companies will tend to have a much shorter qualifying employment period, maybe 12 months, before the date of grant, six months or even just anyone who's employed at the date of grant. So, the company would definitely need to invite the employees to participate in those plans, they couldn't choose not to. I guess the employee to choose themselves not to but I think it would be really against the legislation, I would imagine, for those plans to say, you know, you pick (a) or (b). So I don’t think you could do that. Potentially the company may have decided that it would be willing to grant the employee an option under a discretionary plan the company could then say, well, you could choose to have an option under this plan. or an award under this plan or, alternatively, to have your gym membership. I think if you're going to think about doing something like that you should speak with a friendly lawyer, for example, Pinsent Masons, to just check how you're doing it to make sure you don't come up against any of those things and fail to meet the requirements of the tax legislation.”

Joe Glavina: “So I guess there’s an important communications exercise here for HR?”

Lynette Jacobs: “Yes, absolutely, communication is everything. Again, as I say, just being very careful if it's a tax-advantaged plan that you don't run into anything where the plan you're planning to give to your employees ends up not having the tax advantages you were hoping for because of something you've said or done. Also, just making sure that you're not committing the company to granting options under a plan where it becomes a contractual right and, again, we would always warn against the company against doing that. But, yes, definitely, communication is everything so that employees understand what's available to them and the potential benefits and also potential downsides of those plans.”

That Personnel Today article published last week is called ‘How to compete on flexible benefits for non-office workers’. We’ve put a link to it in the transcript of this programme for you.

LINKS
- Link to Personnel Today article: ‘How to compete on flexible benefits for non-office workers’