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Inform, Motivate, Retain: Communicating your employee share plan during an economic recession

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During periods of economic uncertainty there are plenty of things for those in business to be worried about – from concerns around cash flow and supply chain issues, to sales figures and access to credit, the list can seem endless. With so much demanding your attention it’s all too easy to get bogged down in the running of day-to-day operations – but good leaders know that in times of crisis communication is key and keeping your employees informed about the ongoing situation is essential.

You’ll already be aware of the need to update participants on their equity plan’s progress during the plan’s normal life cycle and, while it might not seem like a top priority during a recession, this is actually something you’ll want to keep doing. The benefits of equity share plans are well documented – they promote retention, loyalty and align staff goals with those of the company, so a mass exodus from your scheme isn’t going to do anyone any favors.

At Global Shares we understand the importance of maintaining clear communication channels. Our platform allows for emails to be centralised and distributed simultaneously, regardless of location, language or time difference, so you can be assured your participants are kept informed during this confusing and troubling time.

Don’t go dark during a downturn

We’ve all seen what needed to be done to communicate effectively during a global pandemic. Those lessons learned show that not only does the tone have to be right but clarity is crucial, especially since employees are more likely to now be located remotely, meaning less in-person interactions.

Empathy is important too. Remember, staff will be feeling the pinch and concerned about their future, their job security and their income. They’ll also be looking at expenditure and outgoings, searching for opportunities where belts might be tightened or luxuries cut.

Although the urge might be there to clam up and focus entirely on the business this is actually when you need to be most open with your employees. By closing down communications you risk having rumour and misinformation run rife. Instead some of the things you do to help untangle these complications could make life that bit easier for everyone.

Most importantly keep in mind that once you lose staff support, it can be very difficult to recover.

Keeping equity intact

Since share plans often exist for long periods with nothing happening apart from relatively minor fluctuations any sudden movement can cause a panic – like in an earthquake. So if you want your employees to know how good their equity compensation scheme is then tell them.

When it comes to their share plan they’ll be wondering:

  • How does the market affect my share plan?
  • Should I withdraw from or cash out of the plan?
  • Is it still a good investment?

Participants need to retain confidence in the plan and an early withdrawal could mean they miss out on the payoff, so you need to ensure they’re given all the relevant information to determine if their investment is still on track.

Similar to a pension plan or 401K where the short term fix during a recession of simply cancelling your contributions or cashing out early might seem like a good idea, this can have serious long term impacts down the line. Employee share plans are similar so any decisions staff make should be based on professional financial advice as opposed to a gut reaction.

Clear, concise, relevant – What you need to be communicating

  • Urgency, transparency, and empathy are your watchwords.
  • Messages should be frictionless and sent using clear lines of communication.
  • Language should be succinct and clear with no space for ambiguity or misinterpretation – misinformation and fake news are your enemies.
  • Communicate frequently but don’t overwhelm.
  • Reiterate the long-term rewards of having an employee stock plan and emphasise why one was set up to benefit staff in the first place.
  • Seeing the value of shares dropping can be concerning. Remind your employees that although markets fluctuate these bumps can often even off over time. Losses are only crystalised when they cash out so choosing that short term solution might mean they have no opportunity for recovery in the long run.
  • An equity plan effectively turns staff into shareholders meaning they are not just employees, they are employee owners – they are invested in the company. Treat them as such.
  • An employee stock plan rewards both loyalty and commitment. Use this opportunity to not only update staff but to educate them on the workings of your plan and how it operates. Chances are that at least a portion of your current workforce will not have worked through an economic downturn before.
  • Give staff the opportunity to provide feedback and be sure to address their queries.
  • Consider establishing a digital hub where all the relevant information can be stored and accessed easily.

Once you’ve implemented your communications programme stick with it. Consistency is key. Your staff will want to know that their job matters and the company they work for is making a positive impact. The steps you take will be of benefit in your central challenge of weathering the economic downturn.

Find out more and request a free demo

At Global Shares, with our award-winning software platform and dedicated team of over 300 equity professionals, we can advise on a communications strategy to help you navigate through this difficult time.

So whether you are an existing client of Global Shares, have yet to set up an employee equity plan or already have another provider but are considering your options, get in touch to find out how we can assist with an equity plan management solution which will help you to attract, reward and retain the quality staff you’ll want onside for your business to succeed.

Employee equity, simplified. It’s what we do.

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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