As we teeter on the precipice of the sharpest recession on record according to the Bank of England, it will be critical that teams across British boardrooms focus on how they are going to grow to insulate themselves. Two key elements to ensure growth is to have enough capital and to motivate your workforce.
Having people that are committed and go that extra mile is going to be imperative during the tough times ahead. So, while it may be likely that we will see redundancies and smaller bonuses for some, how can businesses incentivise and motivate the majority of employees?
The answer could be in all-employee share plans. Offering equity-based reward models can help drive loyalty and can give an employee an element of ‘skin-in-the-game’. If you structure it so that your lower paid employees can benefit from having a stake in the business, they can be more motivated to promote the success of the business and to align their interests with yours. Having someone work for you who has the same interest can work wonders in improving efficiencies and increasing productivity.
While the much commentated debate regarding executive pay rumbles on and is likely to intensify as we head deeper into recession, companies can mitigate some of this backlash by also looking at rewarding their front line too.
What are the options out there?
There are a number of share plans which can provide tax savings to employees - these are Share Incentive Plans, Save as You Earn plans and Company Share Option Plans.
There is also the Enterprise Management Incentive plan which gives significant tax savings for both employees and employers – available to companies with gross assets less than £30million and fewer than 250 employees.
Alternatively, there are discretionary share plans, phantom share plans, profit share structures and restructuring to a partnership.
If you are ready to grow your business and want to incentivise your workforce but are unsure of which route to take, we have years of experience in setting up and running these share plans. Please contact us to find out more information.