How can share schemes help employees build financial resilience?
Need to know:
- Employee share schemes can be successful savings vehicles for staff.
- Take-up of share schemes depends in part on how well they are promoted; the current trend is to make communication as tailored as possible.
- Involving staff in pushing schemes and showing previous outcomes can be effective.
The research, A stake in success, published in May by the Social Market Foundation (SMF), suggests low-income workers who take advantage of employer share schemes could end up better off by £10,000. It’s a significant sum of money but the report also indicates that fewer than 5% of them overall are currently invested in such plans.
How can employers ensure that staff are aware of how beneficial these schemes can be to their financial wellbeing? Murray Tompsett, head of employee share ownership body ProShare, points out that take-up rates in businesses where employee share plans are offered are much higher than 5%. “When they are communicated to eligible employees clearly and concisely, there is usually an initial take-up of around 35%,” he says. “But participation rates can vary and can even be in the high 90s, depending on the [organisation] and industry sector.”
Engage employees with saving
Any communication plan will have an educational element to it. Ian Bird, Partner at Secondsight shares his thoughts with Employee Benefits saying “If employers look out for their staff, the staff will in turn be happier, more engaged with the work they do and more involved in the [organisation’s] success.” Therefore ensuring people want to take advantage of share schemes makes sense for both employees and their organisations.
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