'They love the feeling that they have ownership in the business,' says CPO
Employee share schemes have been around for awhile. In New Zealand they’re typically only offered at the executive level, but offering share scheme to a broader employee base may be gaining popularity.
Why? Opening share schemes to a broader range of employees could help with attracting, motivating and retaining staff, in providing a cash-free source of remuneration.
At Contact Energy, employees have been offered shares since 2013. After a qualifying period, all employees are given the equivalent of $1000 worth of shares. They are vested for three years and once that period is up, the shares belong to the employee and they are free to buy, sell, and trade them.
“It’s always difficult to judge if one particular thing can be directly correlated to retention but it’s fair to say that this is an organisation with very long-tenured people,” said Jan Bibby, chief people experience officer at Contact Energy.
A couple of years ago, in looking at their total remuneration package, the company asked employees if they liked the share scheme, and the answer was overwhelmingly “yes”.
“They love the feeling that they have ownership in the business,” said Bibby. “By being a shareholder, they’re allowed to attend and vote at shareholder meetings, so they have a real connection to the organisation that you don’t get otherwise.”
App helps with understanding of share schemes
Contact Energy has recently boosted the share scheme by teaming up with Kiwi start-up Sharesies to offer broad-based staff share schemes.
“It’s a great lever for companies in terms of engaging their workforce and really making them feel part of it and included,” said Susannah Batley, head of equity capital markets at Sharesies.
In researching the concept of employers giving their staff shares, they uncovered two core problems in the market.
“When we interviewed employees, we found that often they didn’t understand the schemes they were part of. Where the employer did offer a scheme, it was difficult for them to understand the value of it, and it fell short in terms of providing the benefits that it was capable of,” said Batley.
“Then, on the employer side, we found that the schemes were administratively burdensome to run. There’s a lot of complexity around the reporting side.”
With the Sharesies app, employees understand their scheme and can see the value of it.
“We’re always looking for ways that we can create a better experience for our employees, one that’s user-friendly and makes it easy, and Sharesies definitely offers that for us. It’s given our people a much better user experience,” said Bibby.