If your company wants to incentivise and reward employees but has limited cash to pay and retain top talent, an Employee Share Option Plan (ESOP) can be an effective solution.
Research shows that Australian companies that enabled employees to buy company shares using employee share plans experienced higher staff retention rates and increased productivity.
However, while ESOPs have many advantages for both employers and employees, they can be challenging to implement without the right tools and expertise. Here are five common ESOP implementation challenges in Australia and how to navigate them to start reaping the benefits of an employee equity plan.
Workforce globalisation has resulted in the need for flexible ESOPs to meet each country’s taxation and reporting requirements.
Our team of ESOP experts here at BoardRoom can guide you through the complexities of international share plans to ensure a seamless, worry-free ESOP implementation.
Regardless of where your employees are located globally, our world-class technology platform, EmployeeServe, gives your staff real-time access to their employee equity information, including:
transactions and balances;
statements and advice;
accepting employee plan offers; and
transactions on vesting events.
Additionally, the platform enables staff to:
transfer or sell shares;
view company announcements; and
make and receive payments in over 250 currencies around the world.
Our experience shows that companies in Australia still commonly manage their ESOPs via a spreadsheet. However, they are less than ideal for managing ESOPs because they:
require manual data input, which introduces more potential for error;
lack the level of security and confidentiality needed to quickly give all ESOP participants easy access to the data they need; and
do not automatically update as compliance regulations change.
A purpose-designed employee equity plan software like EmployeeServe solves these issues by giving employees fast, accurate, secure access to their ESOP benefit information.
Most people recognise the value of owning shares in the company they work for. However, many staff find understanding ESOPs and the concept of share options difficult.
To boost employee participation in ESOPs, companies should develop a comprehensive staff communication plan. This plan must clearly explain the purpose of ESOPs and their value before the company begins to implement an Employee Share Option Plan.
Our experienced employee share plan team can help your company communicate all the ESOP benefits to your staff and answer any technical questions.
A wealth of time-consuming administrative processes are required to effectively implement and maintain an ESOP, including:
participant information record-keeping;
participant liaison regarding plan mechanisms;
leaver management; and
Instead of allocating in-house resources to do the time-consuming ESOP admin work, let our dedicated share plan team take care of it all for you. Our systems and processes are entirely flexible, allowing us to tailor a solution to meet your needs.
The easier it is for staff to accept offers, keep track of their benefits and exercise their share options, the more likely they are to find value and participate in an ESOP. That’s why making the whole process as user-friendly as possible is one of the keys to ESOP success.
Well-designed ESOP software solutions like our platform EmployeeServe helps boost user experience by providing employees access to:
real-time share option information;
share price movement data;
an integrated share trading platform; and
historical information for individual income tax declaration purposes.
With hundreds of plans under management, BoardRoom has extensive experience managing employee equity plans.
Speak to one of our experts today about how we can help your business to implement and administer a successful Employee Share Option Plan.
Keep up-to-date with the latest industry updates in share registry, employee plans and corporate governance.SUBSCRIBE