Listen up: A company's year-end game plan must include employee feedback

This year has been a rollercoaster for many of us, but there have been some constants amid the chaos—especially when it comes to the outsized impact that the global economy and the need for talent attraction and retention have had on our equity plans. This isn’t exactly a surprise: In fact, equity leaders predicted these key themes way back in February in our 2022 State of Equity Plan Management study.

Given where we are today, it’s a safe bet that these factors will continue to sway every decision plan administrators make as we look ahead to 2023. We’re seeing many companies focus even more energy on improving or even reimagining their equity programs in our unpredictable environment. So, what can you do to fine-tune your participant experience and set your business up for even greater success in talent attraction, retention, and performance in the coming year?

Taking stock of today

An accurate snapshot of where you are today is a hugely important first step, and year-end is a perfect opportunity both to encourage your participants to check in with their plans and to gather their feedback. Just like you, they are navigating a topsy-turvy economy and job market. You want to make sure to get a holistic picture of their experience to see where support matters most. When it comes to recruiting and retention, we need to understand why employees stay or leave in the first place in order to be able to leverage our equity compensation plans to better support a thriving, loyal workplace culture. For example, we learned in the Morgan Stanley 2021 Transparency Report that if a company itself is not diverse or equitable, then it’s nearly impossible for the equity compensation plan to be so. Do your equity participants feel included and valued? Does your wider employee population? To unpack this and other challenges, invite your employees’ honest feedback. Host town halls, surveys, exit interviews, or even “stay interviews” to spark dialogue around employee motivations and perceptions. Track key performance indicators like plan participation among eligible employees, engagement in education campaigns, overall satisfaction rates, views of company culture, year-over-year talent attrition and retention rates, and DE&I (diversity, equity and inclusion) metrics.

Evolving the employee experience

Once you gather that data, think of it as a compass that can help direct your focus on how to enhance how participants interact with and utilize their equity. What do they like and where do they find friction? Do they feel their equity compensation has helped them reach any personal financial goals? How do they feel about their actual digital platform? There are many pieces of the puzzle, so you may want to zoom in on two major areas:

1. Education and communication: It’s hard to connect with something we don’t understand, and with this in mind, it’s important to recognize that much of your employees’ experience hinges on education and communication. In fact, we’ve seen a correlation between more frequent communication and higher employee participation in equity plans. Participants are eager to learn about their stock plans and actively looking for more information—including via their stock plan platform, company intranet, periodic emails, and one-on-one consultations with Financial Advisors.

Make the most of all those channels and more—like newsletters, SMS texts, and workshops and webinars—to keep employees connected with their plans and help them build greater confidence in navigating their equity. In all your communications, look for ways to weave in tangible, real-world examples of how they can include their stock plans in personal financial goals, such as leveraging equity to pay off student debt or make a down payment on a home.

A well-delivered education program can also help lower barriers to entry for employees at all levels. Consider that nearly 2 in 3 want to attend an education session on topics related to Equity, Retirement and Investing, and 4 in 5 believe their companies should play a role in helping them maximize the financial potential of their stock plan benefits. Talk with your provider to find out how they can help you deliver or even outsource a centralized education program—whether you want something ready to go out-of-the-box or customized.

2. Evolving plan design: Believe it or not, there’s no mystery behind a seamless and effective employee experience. What it takes is the right mixture of education, communication, and smart plan design. Among other things, that means working with your provider to ensure an appropriate strategy, excellent service, and up-to-date technology to support your participants along each stage of their equity journey.

Year-end is a great time to reflect on how any strategic adjustments to plan design might yield positive results for your organization. For example, we’ve found that certain plan features like vesting schedules can unintentionally discourage participation. Take vesting schedules, which sometimes conflict with maternity leave and can have a ripple effect of exacerbating gender inequalities in pay and career advancement: Of those who receive 4-5% of their compensation in equity, while 60% are working fathers, only 25% are working mothers. There is exciting potential that even simple adjustments to plan features like these can open equity participation to a more diverse and engaged cohort.

Along with the awards themselves, don’t forget to look for greater flexibility and automation for administrators behind the scenes. Talk to your provider about any technological updates or plan design solutions they may have on tap to help you create a more streamlined equity resource.

Engaging tomorrow

Much has changed in the world this year, but equity awards continue to be a vital business strategy. In fact, our research indicates that equity comp programs will only grow in importance in the next five years as employees seek better work-life balance—and benefits.

Just remember that equity alone isn’t enough: It all translates through the employee experience, and it matters to get that part right. Take the time to listen to employees, digest the data, and then deliver holistic communication and education to empower your people wherever they are today, throughout their entire stock plan experience.

Kate Winget is Head of Corporate & Participant Engagement at Morgan Stanley.