By Denise Scoville-Glackin. Employee stock purchase plans (ESPPs) offer employees a fantastic opportunity to establish an ownership stake in their company and share in its potential growth. The company benefits from ESPP participation as well, because it fosters a positive culture where everyone is focused on a shared goal. While this sounds like a win-win situation, it turns out that many people miss out on this important opportunity.
In our recent stock administration operational benchmark survey, Raising the Bar: Best Practices in Stock Plan Operations, three-quarters of respondents said that of eligible employees at their company, 50% or fewer were participating in the ESPP. What can be done to help increase participation and take advantage of this valuable benefit?
Education and communication are the keys to maximizing plan enrollment. Try some (or all!) of the ideas below to raise awareness and increase engagement.
- Include details about the ESPP in new hire packets and other documents that detail your employee benefits.
- Put up posters in shared spaces such as break rooms and elevator lobbies.
- Distribute flyers to each employee’s work station.
- Think out of the box. For example, one company’s stock administration team wears t-shirts that read “Got Stock?” to boost interest.
- Encourage your management team to talk about their participation in the ESPP and how it has benefited them.
- Ask a key executive to record an all-employee voicemail at enrollment time.
- Help employees understand how the plan works by showing examples based on historical stock growth.
- Publish a plan glossary, FAQs and timeline on your company intranet.
- Leverage your company’s corporate communications team, if you have one.
- Offer “lunch and learn” sessions to provide ESPP education.
- Ask your broker if they have ESPP communications that they can send on your behalf, or templates you can use.
Although the benefits of ESPP participation may seem obvious to you, those who aren’t as familiar with stock plans may need more information before they decide to enroll. Taking the time to raise awareness and provide education will allow you to reap the reward of increased participation.