An employee share scheme (or ‘employee share option scheme’) may bring multiple benefits to employers. Schemes can help you to:
Attract and retain talent
By offering employees the opportunity to acquire shares (ie options) in your company, you’re offering them a chance to share company ownership. This makes your Job offers more attractive to prospective employees.
Sharing ownership can build a sense of loyalty amongst your employees. They may feel more involved in the success of your business and its mission and, consequently, it’s more likely that they will stay with your business for longer.
Increase productivity amongst employees
Employees who are also shareholders may be more engaged in their work, as they may deem themselves to be responsible for the company’s value. This can motivate them to work harder and to innovate to increase revenue, reduce costs, or maximise profitability.
Preserve cash within the company
Offering employees shares options instead of cash as compensation (ie as part of their remuneration package) or as bonuses can relieve your company’s cash flow pressure. Share options may also be more attractive to employees due to the tax benefits attached.