Economic Conditions

It goes without saying that an employee share scheme will only work if your company is successful - rewarding participants through growth in share value, dividends or both.

That may be all very well when your company faces favourable trading conditions. But how well can a share scheme work if trading gets tougher?

Share ownership is all about the long term. Being in business probably means that, whilst you know it is never always going to be a smooth ride, you are optimistic about how well your company will perform over the next two or more years. A well-designed share scheme will reflect this reality, by focussing employees on that longer term.

An employee share scheme can help you attract and retain your employees throughout the life of your business. In times of higher business confidence, when the kind of talented people you need may be in short supply, offering share ownership may help you attract them and provide a powerful reason for them to stay with you. In less confident times, if the gap between revenues and overheads narrows, there are many ways in which a share scheme may help you significantly reduce your company’s fixed costs of employment but still hold on to the people you need.

An enormous number of successful companies partly owe their success to extensive and committed employee share ownership. For many, this has enabled them both to manage costs in leaner times and deliver significant rewards for longer term success.