ESPP plan administrators can often find themselves scratching their heads. They wonder: why is my plan's enrolment rate under acheiving? In fact, according to a recent survey, the majority of respondents found that they had a lower than expected enrolment rate.
Which is strange, right? ESPPs are a great benefit for employees, so there really must be a reason why takeup rates could be low. We’ve listed a few ideas to jumpstart your ESPP, and boost your enrolment rates.
There are so many benefits to ESPPs – increased recruitment and retention, higher job satisfaction and motivation, and tax-efficient earnings to name a few – that they might seem obvious to those who understand them. There can be a temptation for share plan administrators to get complacent, and assume they don’t need to spell everything out for their participants. This couldn’t be further from the truth.
In reality, many participants will not understand the entire range of benefits, and some will not understand them at all. Or rather, those that understand the benefits will think they’re too good to be true, and that there must be some catch that they don't see. But there's not any catch – ESPPs really are that powerful.
So, make sure you go through each and every benefit. It might help to go through the benefits to the company as well, so they understand the entire policy. Once people see how ESPPs work, they become converts. But in order for them to see it, you need to show them.
When you’re showing the participants how ESPPs work, make sure to explain it all in clear, jargon-free language. Too often, companies will be worried that they’re not fully explaining something if they’re summarizing, or using language that’s more clear. But in reality, if they’re using the confusing, dense language of the legal department, they’re not explaining anything at all.
Nothing sinks enrolment faster than employees not understanding what exactly they’re enrolling in. Why would they? It’s a long term benefit, so they need to trust it. If they don’t understand it, they won’t trust it.
Start from the start
One of the benefits of ESPPs is in recruitment and retention. An ESPP is a great benefit, one that makes a company more desirable. So, we shouldn’t have to tell you that you should mention your ESPP during recruitment efforts.
But what we might need to tell you is how much you should mention it. Because if that recruit accepts your offer of employment, you want to make sure that they at least understand that an ESPP is a great benefit. But then, you need to continue. There should be a lot of talk during orientation and on-boarding about the benefits and importance of the ESPP. It should be clear to the new employees that employee ownership is an integral part of the company.
Make it a prominent part of the company’s message
You can do this a few ways. One is by distributing the information in a campaign – well-designed emails and videos, leaflets and posters. This is the traditional way that ESPP enrolment campaigns are announced and promoted.
But to make sure that your ESPP gets the enrolment numbers you’re looking for, you need to do more. Arrange coffee meetings (or, these days, Zoom meetings) with interested employees and plan ambassadors. Get your leadership talking about the ESPP in their usual communications to the company. Add information to your company’s intranet. There are many ways to get your message out into the company. Try them all and see what works best.
Prioritize employee feedback
In order to see what works best, you need to get feedback from your employees. Because communication is a two-way street. Too often, companies focus on only one side – communicating the information to the employees. But the other side – what employees think and feel – is arguably more important.
Think of it this way. You can write communicate your message a million times, you can use crystal clear language, and explain all the benefits of ESPPs, but it won’t make a difference if you’re not listening to your employees. Maybe most of your employees are focusing on how to save for their retirement, but you’re pushing the short-term benefits of ESPP, or vice versa. Maybe your employees understand the financial aspect, but not the company-wide morale aspect.
To communicate effectively, you need to reach your audience where they’re at. And the most effective way to determine where they’re at is to ask them, and listen to their answer.
If you’ve already tried these, or want to try them but are unsure where to start, contact us today. Here at Global Shares, we have nearly 15 years of award-winning experience in equity compensation, and we’d be more than happy to help.