Employeesemployee stock purchase plan

If you are a business owner or manager, you know how important it is to come up with the right benefit packages for your employees. While doing so, you have to take extra care in ensuring that you provide nothing less than what they deserve. Benefits such as dental and medical insurance and 401(k) are almost expected, particularly in bigger companies. But, have you ever considering offering your workers an Employee Stock Purchase Plan?

There are actually many reasons why it is a must to offer an ESSP or Employee Stock Purchase Plan these days, and some of them are the following.

Attract and Recruit Top Talent

Benefits such as medical insurance and 401(k) are already baseline benefits which will not make your company too attractive in the eyes of potential employees. However, only half of public companies are offering an ESSP. Adding this as a part of your offer can make your company stand out from the rest of the crowd, and help you attract top recruits.

Improve Employee Performance

Studies have revealed that there is a significant difference in terms of employee performance between those who participate in an ESSP and those who do not. it was found out that workers who are offered with an Employee Stock Purchase Plan tend to work longer hours. They are also less likely to quit, and they have less absences from work. On top of that, these workers express greater satisfaction with their job which motivates them to do better each day. in simple words, having ESSP offered to your employees can lead to a better, more valuable, and more engaged workforce.

Hone an Ownership Culture Within Your Company

An Employee Stock Purchase Plan is the easiest and even more cost effective means for your employees to buy their own shares in your company. When your employees are owners at the same time, they will have greater stake in the company’s success or failure, and this in itself is an extremely powerful motivator.

Raise More Capital

Regular payroll deductions from your participating employees can provide a steady stream of income for your company.

ESSP is an All-Encompassing Benefit

Employee Stock Purchase Plan is among the few benefits that you can make available to all your employees, which include those who work in countries outside the United States.

Lower Expense Compared to Other Equity Compensations

Based on shares, ESSPs have lower valuation than other types of equity compensation. You can also lower your compensation expense through setting limits on the share purchases.

Increase Employee Savings

The savings rates are among the biggest issues in the US. However, with the automatic and regular share purchases and payroll deductions, an Employee Stock Purchase Plan helps employees to save more. On top of that, it will also be easier for them to access this capital should the need arise.

In most cases, offering an Employee Stock Purchase Plan is a more cost effective benefit you can provide to your employees than the more common benefits which can be cost prohibitive. This is why it makes perfect sense to make ESSP something you can consider for the sake of both you and your employees.

 

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