How an equity compensation program can make your employees feel seen and valued

As more people are on the hunt for new career opportunities than ever before, companies are looking for innovative and creative ways to attract and retain talent. And the conversation is urgent: Deloitte found that almost three quarters of CEOs rank a labor and skills shortage as the number one external issue they expect to influence or disrupt their business strategy in the next 12 months — even more so than the ongoing pandemic.

And while many employers think the top factors affecting attrition are compensation, work-life balance, and poor physical or emotional health, McKinsey research shows a more nuanced reality. While these issues are very important, the top reasons employees give for leaving their jobs were instead not feeling valued by their organizations and their managers, or not feeling a sense of belonging at work.

In other words, retaining talent hinges on a sense of being valued as much as compensation. To convey this value in an environment that continues to be largely remote, start at the foundational level: Do your employees understand how they can benefit from the benefits you offer?

Seeing is believing
Employees want to feel a true sense of belonging and value with their companies, and benefits are an especially timely and valuable tool already in your kit as an employer. Equity compensation programs in particular are a tried-and-true way to create a strong sense of connection, but not every employee at every organization receives equity.

Read more: UKG is launching a multimillion-dollar pay equity initiative

To expand that sense of ownership, some companies roll out voluntary employee stock purchase programs to allow employees at all levels to participate. Wherever your company’s equity program stands, here’s why this is a good time to rethink its role in talent retention talks:

• A recent Morgan Stanley at Work participant survey found that nearly three out of five participants view equity comp as a reason they have stayed with their current employer — and two out of five cite it as a reason they joined their current company.
• Yet, equity comp is still thought of more as extra pay than as a core part of their financial life, and most participants are also not very confident in how to maximize the financial benefit of their equity.

Even seasoned executives may need help translating the impact of their equity from the screen to the real world. Your participants can benefit from educational content aimed at thinking through tax strategies, navigating the user experienc, and connecting their benefits to their broader financial picture — from offsetting taxable gains through charitable giving or other family office-type programs to creating a balanced portfolio for multifaceted financial goals.

Tools of the trade
To convey value in a remote environment, HR leaders and providers must capture more of their participants’ attention. Digital experiences help deliver scale to benefits platforms, which makes creating a compelling and easy-to-navigate user experience more important than ever.

As you focus on retention — and opportunities to elevate the perceived value of your equity programs — here are some approaches we’ve seen work for employers.

1. Keep the content consumable. Equity communication and education needs to be as simple and as easy as possible. Short, concise videos packed with illustrations and examples are helpful, and global companies should also concentrate on sourcing reliable translations. 

2. Get mobile. As individuals grow ever more comfortable with a quick point of access to their equity, providers and companies are shifting focus to the mobile experience. Yet one third of participants weren’t even aware they had a mobile app. If they don’t know about it, you’re missing a major opportunity to engage.

3. Lead your leaders. Reinforce your culture of belonging, value, and ownership by making sure employees can find support when they look for it. Work with management-level individuals to ensure they understand the value of your benefits programs and can effectively communicate them to their teams.

4. Stay together while apart. Becoming more comfortable in virtual environments means bringing multiple locations together at the same time to hear the same information. Many employers leverage virtual tools to deliver large remote education sessions that can simultaneously record for on-demand review. 

5. Invest in your intranet. Your providers are there to help, but a best-in-class experience requires companies to also roll up their sleeves. Consider partnering with your providers as you build dedicated intranet sites to offer employees information on their benefits and equity offerings, educational resources, and support.

Make it meaningful
While the realities of your benefits programs may be complex, the good news is that the recipe for satisfied employees can be simple: Clarify the meaning and value behind the equity compensation, financial wellness, or any other benefit on tap to help employees feel valued. Creating that meaningful connection for employees is one of the best retention moves companies can make.