Nearly half (47 per cent) of employers say their workforce attrition was higher in 2021 than it was in 2020, according to a survey by Rebel & Co. on behalf of Morgan Stanley at Work.
The survey, which polled equity leaders from more than 400 global companies, found 32 per cent of respondents are looking to beef up their benefits offerings by expanding their equity compensation programs to attract and retain talent.
More than a third (35 per cent) of public companies said they’re providing lookbacks — which allow employees to buy shares at the lower of two price points — and other discounts for employee stock purchase programs, while 32 per cent of U.S. and Canadian companies said they’re offering shorter and more flexible vesting schedules that cater to employees’ needs. In addition, amid new demand for flexibility and competition for talent, 63 per cent of private companies said they include cliff vesting compared to 83 per cent of public companies.
“This report shows that even as the way we work continues to evolve, equity compensation is only increasing in importance as a key tool in attracting and retaining the best talent throughout an organization,” said Scott Whatley, managing director and global head of equity solutions of Morgan Stanley at Work, in a press release. “In 2022, companies can not only get a leg up in the war for talent by updating their equity compensation plans, but also significantly help employees reach their financial goals.”
While equity compensation is a key benefit for companies to attract and retain talent, just 35 per cent of private companies surveyed said they’re providing this benefit to executives and all employees compared to 43 per cent of public companies. When asked about initiatives to retain employees in the past year, close to half (48 per cent) of public companies surveyed said they’re expanding their offerings to a wider range of employees compared to 35 per cent of private companies.
Additionally, the vast majority (88 per cent) of respondents said they believe their current equity compensation plan is at least good (50 per cent) or excellent (38 per cent) at retaining talent, while just 13 per cent said it was poor (two per cent) or needs improvement (11 per cent). Among those that indicated their current equity compensation plan wasn’t successful in talent acquisition or retention, 55 per cent said employees are leaving for opportunities that offer stronger benefits or more work-life benefits, irrespective of equity offered.