Why You Need Stock Plan Administration Software 

Content Team March 6, 2024 mins read

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Global Shares’ Content Team comprises a dynamic and talented team of writers and experienced professionals who strive to deliver useful equity insights and simplify complex equity information, all with the aim of helping you to better understand equity management.

Why You Need Stock Plan Administration Software 

Companies with employee equity plans generally learn about the importance of stock plan administration software via one of two routes – the easy way or the hard way.

The Easy Way: A Streamlined Solution

The easy way is to recognize as early as possible the time, reliability, and efficiency benefits associated with automating the administration process, and this, in turn, will lead you to seek out a software solution provider such as Global Shares and look to benefit from solid experience and expertise in the field.

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Our tool is an award-winning platform, which replaces past administrative complexities with smart, simplified software, catering for every plan complexity and award type imaginable.

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The Hard Way: Manual Processes and Spreadsheets

The hard way, meanwhile, is a rockier path, with a lot of unnecessary and time-consuming administration-related aggravation.

Companies who initially opt for a manual, spreadsheet-based approach to overseeing their employee stock plan will most likely eventually come around to the idea of going with a software solution, but only after enduring many headaches and having to deal with the near-inevitability of manual input-related errors and/or the massive time-commitment required to try to keep the various plan details up to date.

The spreadsheet option might seem feasible on day one, but this is usually a function of key decision-makers who have not been down the employee equity plan track before and therefore underestimating the full extent of the time, effort, and ongoing attention to detail required to keep all the relevant plates spinning as the company’s equity ownership picture grows more complex over time.

Manual Stock Plan Administration Downsides

In practice, looking to handle your stock plan administration in-house and manually brings with it any number of potential pitfalls. Among the typical issues that come up are:

1. Admin Burden

Even if maintaining a stock plan wasn’t time-consuming (and it is), the time spent on doing so could be used for other tasks. That might not seem like a big deal when looked at in the here and now, but consider the implications over a period of months and years. There are only so many hours in the working day, and you do not want key personnel having to park other priorities as they grapple with the various stock plan admin tasks and issues that will arise on a near-daily basis.

2. Promotion and Participation

When you attempt to launch and run an internal stock plan on your own, you run the risk of not promoting it as effectively as might an outside partner with specific expertise in the area. A key component of any successful stock plan is participation. That means you need to engage your employees and then convert that interest into sign-ups. If they don’t understand what is being proposed or fail to see the benefit for them, this will impact adversely on participation rates.

3. Technology, Ease of Use, and Basic Understanding

On a related point, when a plan is managed through spreadsheets, it can be difficult for participants to understand how their stock is performing. Also, making transactions can prove slow and cumbersome. Ultimately, if you don’t make the process as user-friendly as possible for prospective participants, then you will make the plan less attractive to them. A stock plan maintained on a spreadsheet is by its very nature not user-friendly or at the very least not as user-friendly as it could be.

4. How Well the Plan is Working

Manually managing your employee stock plan internally on a spreadsheet can also leave you guessing on how well the plan is actually performing. The time involved in merely trying to ensure all details are kept up-to-date and the file error-free will likely leave you without either the means or the time to benchmark your plan against those of competitors and assess whether you are current with best practices.

One of the key objectives of any stock plan is to help you recruit and retain key personnel. You need to know whether or not your plan is making a positive difference on that front. If you are unclear on this basic point, then that is problematic.

5. Reliability

In some respects, this is the most obvious point, but it cannot be made too many times – relying on manual entry spreadsheets almost guarantees that mistakes will be made. Over time, human error is unavoidable and when a mistake creeps into a spreadsheet, it may go undetected for a period, compound over time, and then prove difficult to track back to the source. At the risk of stating the obvious, this type of scenario needs to be avoided if at all possible. And it is possible to avoid it – just not with spreadsheets.

The Case for Stock Plan Administration Software

Equity compensation solutions are complex and highly specialized, with rigorous reporting and compliance demands, pushing HR and Equity Compensation professionals to the limit every day. When viewed against that backdrop, opting for an in-house manual input solution almost amounts to tying one hand behind your own back.

Why would you do that when there is a better way available to you? This brings us back to our initial point about the easy way and the hard way.

The hard way, beyond doubt, is to go with an in-house manual input solution. The easy way, relatively speaking, is to opt for an automated approach to managing your employee stock plan. More specifically, you require a one-stop solution, managed through an online, automated process, which synchronizes with payroll, HR, tax, accounting, and reporting systems. This will save time and money, while also, crucially, measurably reducing the risk of manual errors. As well as that, automated software brings with it an improved participant experience, the importance of which needs to be fully appreciated.

When initially looking to sell the merits of the plan to employees, it’s not just about offering stock, it also needs to be about reassuring them that they will be able to manage their own allocations with relative ease. This will not be possible if you are using spreadsheets, but dedicated software will offer participants online account management tools and a more straightforward means of making transactions. Being able to emphasise these elements will make the plan more attractive to employees and therefore make them more likely to sign up.

So, Why Should you Outsource your Stock Plan Administration Software?

Global Shares as your Stock Plan Administration Software Provider

As should be clear by this point, attempting to set up and manage your stock plan on your own may prove a daunting prospect, both in terms of the time involved, the potential risks involved and the actual work itself.

Global Shares has the experience and the expertise to be your partner and provide you with the automated stock plan management platform that you need.

Our tool is an award-winning platform, which replaces past administrative complexities with smart, simplified software, catering for every plan complexity and award type imaginable. It streamlines the day-to-day execution of transactions, with full automation of administration, tracking, and reporting of all stock plan activities for companies.

It includes key features such as complex tax calculation, vesting and restriction capabilities, a highly flexible communication centre, provision of stock price, exchange rate feeds, and multi-file format import/export capabilities.

All your Stock Plan Administration requirements are catered for, with a complete range of employee and HR equity administration services and financial reporting tools at your fingertips.

Other features include:

1. All your stock plan administration questions, requirements, and concerns are discussed, documented, and covered in an initial ‘Discovery’ meeting, to identify how we can best meet your needs.

2. Your complete Stock Plan Administration solution is set up and configured quickly and specifically for your needs and those of your employees.

3. All types of Grants, Awards, and Plans are managed online, from small executive stock option plans to large global stock plans or custom award types.

4. You are assigned a personal relationship manager who will know you, your requirements, and your plan and assist you at all stages.

5. You can significantly reduce your workload and costs with our advanced Participant Portal.

To sum up, Global Shares will provide you with all the tools you need to manage information, assist employees, and satisfy compliance by following relevant rules and regulations.

With our fully managed stock plan administration software, you put our knowledge and expertise to work for you.  After all, we are an employee-owned company and our team of people is our greatest asset. We value the importance of employee ownership — so we want you to get it right too.

Contact us today and request a free demo.

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Please Note: This publication contains general information only and Global Shares is not, through this article, issuing any advice, be it legal, financial, tax-related, business-related, professional or other. The Global Shares Academy is not a substitute for professional advice and should not be used as such. Global Shares does not assume any liability for reliance on the information provided herein.

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