An Employee Share Scheme – the no-brainer way to grow your business

Content Team February 19, 2020 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.

An Employee Share Scheme – the no-brainer way to grow your business

If you’ve been listening to the news recently, you’ve probably been hearing more and more about employee share schemes. Budget 2020 made substantial steps towards making them more widely available in Ireland – it’s big news because employee share schemes make both employees and employers equally happy. Employee share schemes benefit everybody.

So, what are the benefits of an employee share scheme?

There are plenty of reasons that employees love an employee share scheme. The main reason is in there in the name – employees get shares in the company. In turn, this results in higher pay and more savings for employees.

But it doesn’t hurt your bottom line. In fact, an employee share scheme is a great way to free up capital. The cost of setting up the plan is allowable for corporate tax purposes, and it’s a bonus that you don’t pay employer PRSI on. Not to mention, the annual dividends can be used to raise that bottom line a bit higher, making your company more resilient. According to research, companies with employee ownership perform better in times of economic downturn.

And owning shares in the company means that an employee’s contribution to the company has a direct connection with their own benefits. For you, this means better employee performance, satisfaction and motivation. Suddenly, all your employees are thinking and planning like business owners and management.

What are the best steps to take?

Any employee share scheme can do these things – but you can use your scheme to take things to the next level.

For example, getting your employees involved in the planning stages of your employee share scheme is a game-changer. Many companies have already designed and rolled out their plan by the time they start hearing any feedback – only to discover that the employees would’ve preferred a different setup. As a result, they’ve set themselves up for failure.

If you get your employees involved early, however, not only do you guarantee your employees are going to love your plan, but you’re also helping to reinforce the fact that their voices matter – that they are heard. Simply becoming an employee-owner will make a great start towards this, but when you actively listen to your employees, they start to see employee ownership in action. Besides, when it comes time to launch your scheme, you’ll have an entire network of employees who already understand the plan and its benefits, and are eager to share this information with their colleagues.

These benefits for your employees are all equally beneficial for you and your company. That’s the best thing about employee share schemes – they reverse the standard order of things. It used to be that companies had to cut benefits for their employees in order to make their company more resilient and flexible. Now, with employee share schemes, they achieve better results, while making their employees even happier.

How can you roll out an employee share scheme?

But you can’t do it alone. You need the software to manage your plan effectively, to ensure your participants can get the maximum benefit out of their plans. Not only that, but if you’re using an employee share scheme to help your business grow, then you need the administrative support to ensure your scheme grows along with you and stays on track. If you want to keep your employee share scheme as no-brainer as possible, contact Global Shares for a no-commitment 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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