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Why should you provide Employee Share Options to your team members?

Yiannis Papadopoulos

May 30, 2022 10:45 pm

Nowadays everyone is talking about the great resignation and how the talent demands more from the employers, such as remote working, development and growth, but also one factor that can differentiate your business from the competition is sharing ownership and engaging the talent to the company’s growth.

Many founders and company directors talk openly about sharing ownership with key talent, others already shared with their team equity with their talent.

The benefits of sharing ownership of your business are numerous and we are going to discuss them one by one:

  1. The first and most important benefit is the mindset change of the talent, from being an employee to being an entrepreneur. When you offer employee share options to your team, they become engaged and feel a stronger connection to the success of your business. They will feel and think like an owner, working more passionately to ensure business growth.
  2. Attract the best talent and compete with the highly incentivised employees nowadays with remote working and globalisation, businesses do not compete against the local businesses for the talent; they compete with global organisations; therefore, they are struggling to attract the best talent except if they pay top dollar someone would have thought of. But by sharing your equity, you can compete against the bigger organisations around the world and attract the best talent; a side benefit? The cash flow relief that you are getting by providing equity to your people that you can invest somewhere else in your business.
  3. The job is not done when you attract the best talent, but you need to retain that talent. An average cost of replacing employees can cost you up to 2x the cost of the leaver and can cause a much bigger disruption to your business. Employee Share Option Schemes contain a time period called the "vested period". Which is the period that the Employee Share Options can not be exercised to ordinary shares in the company until they vest, which encourages the employees to stay with the company longer, achieving great things together.
  4. If employees feel that their work makes a difference and that it really matters for the success of the company, they'll be much happier and involved at work. And happy employees are great for productivity and profitability. Giving employees share options for the value they provide enables companies to create not just highly productive teams but also shareholding teams. When an employee shares in your company's success, they feel more invested in it and that's when you start seeing results!
  5. Ownership has the ability to unite people and it brings a sense of purpose (mission, vision of the business). When employees are also shareholders, their motivation to do their best work and contribute to the company skyrockets. In fact, one study showed that employee share options can make people up to 30% more productive and they are also more likely to stick with the purpose. Resulting in a better work culture and happier team that will take on new challenges with gusto.
  6. The result of all these benefits of sharing ownership? Something unique as you are working together with your team; they feel engaged, motivated and more committed to the business, making leaps forwards and driving the growth in overall business value.

At OptIn, we believe that the differentiator factor of the success of the business is the teams behind them; hence engage them and motivate them by sharing ownership with them to achieve great things together. Are you ready to engage your talent in your company’s growth? We offer a free consultation to find out what’s the best Employee Share Option Scheme for your business.