An increasing number of workers are considering the availability of a company stock plan when evaluating a new job opportunity, according to research conducted by Fidelity Investments.
When asked about the importance of company stock plans as part of their compensation and benefits package, 86% of respondents under the age of 40 said they would want their new employer to offer a company stock plan if they changed jobs.
In addition, 40% of overall respondents consider a company stock plan as a must-have when making a decision to change employers, and 37% of respondents indicated that giving up their company stock plan would make it harder for them to leave their current job.
A rebounding job market has intensified the competition for talented workers, and employee retention has emerged as one of the top corporate HR challenges for 2014.
As a result, an increasing number of companies are utilizing stock plans to enhance their overall benefits package and attract and retain employees at all levels, from senior executives to recent college graduates.
While Fidelity’s survey reflects that the majority of employees still value “traditional” company benefits, 29% of employees consider a company stock plan as one of their most valued benefits. In fact, 10% of respondents ranked their company stock plan as their most valued benefit, ahead of a healthcare plan, DC plan and all other employee benefits such as a dental plan and child care.
“The availability of a company stock plan can ‘tip the scale’ in a company’s favour when employees are evaluating job opportunities, especially in industries that demand highly skilled or specialized workers,” says Kevin Barry, executive vice-president, stock plan services, at Fidelity Investments.
According to Fidelity’s study, company stock plans can help increase employee loyalty and worker productivity. Fifty-seven percent of employees indicate that equity compensation plans contribute to their feeling loyal to their employer, and 54% indicate their company stock plan “provides an incentive to work harder and be rewarded for the company’s performance.”
In addition, the study found employees in company stock plans are highly engaged in their companies’ performance, with 89% of respondents knowing the current price of their company stock and 85% knowing the overall value of their stock plan assets and their vesting schedule.
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