Uru nke inye ndị ọrụ òkè ụlọ ọrụ

But they may not always be able to compete with the benefits and high salaries offered by larger corporations. Offering employees the opportunity to invest in company stock shares can be a great incentive for employees to perform well and stay with the company in order to get a return on investment. Potential employees will be intrigued by investment opportunities during the hiring process because it will set your startup apart from others in your industry. 

Inviting your employees to invest in your company shows that you care about their future with your company and have a concrete plan for the growth of your company in the next few years. If you’re a startup looking to hire competitive, young employees with technology and media experience, you may just be in luck. One study from Pay Scale shows that Generation Z and Millennials actually prefer working for smaller companies, and offering investment opportunities has the potential to give you an additional edge. 

In the study, 47% of participants aged 19 to 29 worked for companies with less than 100 employees. 30% worked for mid-sized companies and only 23% worked for larger corporations. Young people are interested in making a difference, and smaller companies give them the chance to do so. Furthermore, young people are impatient with the hierarchies at bigger companies and are looking for places of employment that recognize their talent and work individually. American basketball coach Ọgbakọ Pat once said, “Responsibility equals accountability equals ownership. And a sense of ownership is the most powerful weapon a team or organization can have.” These words of wisdom apply to more than just basketball. Companies are teams, and giving your employees tangible ownership in your company will likely lead to an increase in responsibility and self-accountability. 

If you’re a larger company looking to draw a passionate and competitive pool of applicants, offering company shares could be the way to accomplish that. When employees have a personal stake in the company, they’re more likely to feel like their work is directly contributing to a future goal. Anne M. Mulcahy, the former CEO of Xerox Corporation, says, “Employees are a company’s greatest asset—they’re your competitive advantage. You want to attract and retain the best; provide them with encouragement, stimulus, and make them feel that they are an integral part of the company’s mission.”

How to Offer Company Stock

Typically, companies offer shares to employees at a specified and discounted rate. Employees should not be required to invest in company stock. Encourage employees to invest in your startup or company in a way that feels like a personal investment in their future. As long as the company owner continues to maintain a majority stake in the company, they can continue to make business decisions. The first step in offering company stock is deciding how much you want to share. Stock grants are typically sold in shares of 100. You may want to offer a further discounted rate for long-time employees and set a minimum employment time frame for new employees before offering stock options.

Read on for some additional benefits that employee stock shares can provide.

1. Obtain Capital to Grow Your Business

If you offer 25,000 shares to each employee, you will gain a significant amount of capital—even if only some of your employees choose to invest in your company’s stock. This will allow you to further grow your business, benefiting both you and your employees. Max Schwartzapfel, CMO of Fighting For You says, “Offering your employees an employee stock ownership plan is actually a great way to grow your business. You’re really thinking about the future of your company, and you can put the money from those stock shares right back into its growth. Plus you get tax savings and it makes the process of selling your business easier—if and when you eventually decide to do that.”

2. Protections Against Employee Turnover

Justin Soleimani, Co-Founder of idahari, points out that company shares can act as protection against employee turnover. “If you choose to offer company shares to your employees, you might even see a reduction in your employee turnover rate. Giving your employees a small share of your company tells them you trust them to be responsible and that you believe in their future with you, especially if you require that employee to work with you for a period of time before offering shares. If your employees do choose to leave after choosing to invest, they won’t get to see their stock increase. They may think twice about doing that.”

3. Improve Employee Performance

If employees have an active stake in your company, then their wage or salary will effectively be increasing with the company’s growth and success. Tyler Read, Founder and Senior Editor at Personal Trainer Pioneer notes that this can improve employee performance. He says, “From my past experience, employees with company shares are motivated to help their company grow. Most employees working in the corporate world receive a steady salary no matter what they do. Of course, they want to do their job well, but entry-level employees sometimes feel like their ideas and contributions go unnoticed. In companies that offer stock shares, employees can see the direct impact of their work on a company’s growth. And as small business owners, our goal is for our employees to be as passionate and creative about their work as we are—stocks are just one method in reaching that goal.”

4. Drawing Competitive Applicants

Lina Miranda, VP of Marketing at AdQuick notes the benefits of offering company shares in competitive markets that are saturated with applicants of varying skill levels. “I understand that it’s hard for small businesses and startups to find employees that suit their business needs. Even entry-level applicants are drawn to large companies with the promise of a higher salary and benefits. I’ve found that small businesses tend to draw applicants with career growth opportunities, and stocks are one of the best career growth opportunities that a company can have. Offering company shares is actually a way of encouraging your employees to invest in their own career growth. It draws those candidates who are truly interested in the company’s vision and have the self-discipline and motivation to succeed.”

mmechi

Company shares are a unique way to appeal to future employees and solidify the loyalty of long-time employees. It’s a benefit and a method of supporting employees’ career growth that can be implemented even without increasing everyone’s salaries. Some employees might even say that personally investing in their company is as tantalizing as a promotion.