Business owners regularly rate “people issues” as one of their top 3 headaches (the other 2 often being growth and cashflow). A common theme is that they can’t seem to get their employees to “be more accountable”, “be more proactive” or “take ownership”.
There is a myriad of tools you can use to address these issues but there is a very powerful lever available to address all these issues that is often misunderstood, and therefore, often overlooked.
The best way to get your employees to think and act like business owners is to MAKE THEM a business owner. And the best way to do that is using a well-designed employee share scheme.
Numerous credible research studies on the benefits of employee share schemes have provided impressive quantitative and qualitative evidence to support their use. Consider some of these numbers from an often-quoted 2003 study:
- Employee productivity up 4%
- Return on equity up 14%
- Profit margins up 11%
There are several challenges to consider when looking at bringing on an employee as a business owner. The first is how do they get access to the capital required. Secondly, how to avoid a bunch of taxation issues. And thirdly how to retain control of the business.
A well-designed employee share scheme can overcome all these issues. Given there is some complexity involved it’s important to partner with an expert in this area.
