The benefits of investment in share ownership

As part of its growth agenda, the government has indicated that it wants more investment – but not just from “big institutions”.  There is a desire to get “ordinary individuals” (known as “retail” investors” in the industry parlance) more confident in making investments outside of their pension and standard savings accounts.

It will be interesting to see if initiatives like the new PISCES stock exchange for private companies and the talk around extending EMI Option applicability will help with this change.

Psychologically, it is interesting to understand what the government want to achieve from this push for increased risk by employees – perhaps they have a view that people who are willing to invest and take a risk will help create a more creative and growth minded economy.

Certainly, from our experience, the feedback we get from our clients who put in place widespread employee share plans is that it does create a positive difference in the workplace.

Aside from the evidence which indicates that the simple act of having an employee share plan increases retention within the workforce, having a share in the value of the business naturally makes people curious as to what that value is.  For effective leaders, it is a short step to take that curiosity and develop it further – making employees to start to wonder what could be done to increase that value and, most crucially, what could THEY do to help make that change.

Whilst listed companies are can easily set up an all-employee share plan, it is not much more complex to set up one in a private company.  Once created, employee share plans can be the catalyst for better conversations across the entire business.  And as any HR department would tell you, an engaged workforce is a more productive one.

If the above matters resonate and you would like to discuss how MM&K could assist you with developing your approach to incentive structures – please contact Stuart James (stuart.james@mm-k.com) in the first instance.

Back to News