Do employees really value the benefit of a share plan?
In an increasingly competitive world, organisations need to get the best out of their teams. A strong remuneration and people strategy is key to success, and share plans can play a vital role in both.
Over 2 million employees take part in a variety of share plans and with almost 1.5 million participants, sharesave still has a good slice of the action - understandably so when you consider it has been around for over 35 years. But do we really understand what sharesave means to employees?
IFS ProShare, the voice of employee ownership, produce an annual report using data from principal share plan administrators. The recently published 2016 ifs ProShare statistics (based on 2015 data) show that:
- 420 companies of the 489 surveyed continue to regularly offer Sharesave to their employees
- 80% of these companies offer the maximum discount of 20% on the share price with the average monthly saving at £119.78 per month
While the above highlights trends from the annual survey results, it tells us very little about the behaviours of share plan participants and what they do with their savings.
Louise Drake, national sales manager – growth and acquisition at YBS Share Plans, said Pension changes and share ownership are current hot topics, with help-to-save and Lifetime Isa also bringing personal savings into sharp focus. "We’re passionate about understanding what really engages our customers and this increased understanding will help us better position the range of employee benefits on offer, support the financial education agenda and benefit the sector as a whole," she said.
YBS Share Plans (“YBSSP”), part of Yorkshire Building Society, recently commissioned research for the second time in five years with leading academics Professor Andrew Pendleton, of Durham University Business School, and Professor Andrew Robinson, of Leeds University Business School. The research is supported by YBSSP’S own Customer Insight Surveys.
Key findings from the research:
- Participant savings contributions to Sharesave continue to rise
- Sharesave is still attractive to those on lower income with 25% of participants saving £60 per month or less
- For many, Sharesave provides a savings lifeline with 35% of participants only saving regularly into their Sharesave account.
- For many the alternative to Sharesave contributions is expenditure with 65% of those saving only into Sharesave saying they would spend the money rather than invest elsewhere if Sharesave didn’t exist
“With over 45% Sharesave market share, YBSSP have a meaningful sample size from which to draw our analysis. This insight enables us to continually feedback to our corporate clients to ensure that plan designs and overall remuneration strategies are aligned with the wishes of their employees,” added Drake
This article was provided by YBS Share Plans, part of Yorkshire Building Society.
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