Talking Money
The ProShare conference couldn’t have been more timely, taking place just one week after Kwasi Kwarteng announced the mini-budget that sent the UK economy into disarray. Amidst the turbulence, the announcement included welcome changes to share plans, such as the doubling of the CSOP limit to £60,000 – something that ProShare proposed in its response to the call for evidence on EMI – and a change in the rules regarding the types of shares that can be included in a CSOP.
Some of the changes that Kwarteng announced have been reversed in subsequent weeks, but many people across the country are still concerned about how they will manage over the winter as the cost of essentials such as fuel, food and even mortgages is rising much more quickly than wages.
In his opening speech, Murray Tompsett, Head of ProShare, highlighted the day’s key themes of financial resilience, financial wellbeing and financial education which had been selected at the start of the year. We knew at the time that we were headed for choppy economic waters but, since then, the cost-of-living crisis has become headline news. With money being a key concern for many people in the UK, Murray noted that, at ProShare, they ‘knew that employee share plans had their own small part to play in tackling the financial challenges that employees were facing.’
While over 300 people attended the conference from across the share plan industry, the programme felt relevant to a much wider audience. Share plans are part of the broader reward package and feed into employers’ responsibility to look after their staff – prioritisation of which has been a positive legacy of the COVID-19 pandemic.
Participation in share plans
Economic instability will probably have an impact on employee share plan participation; the value of shares may fluctuate as confidence in the UK economy wavers. For some employees, recent events may have highlighted the importance of having a financial safety net and the resilience that share plans can provide, while for others, immediate cost pressures will mean that they opt out of share plans in favour of cash. Roger Fairhead, Group Reward Director at Legal and General, warned that a widespread opt out now could create a ‘ticking timebomb’ for the future as lower paid groups exclude themselves from long-term benefit.
The solution to this may well be education. Leanne Scimia, Group Reward Manager at RS Group plc, reminded delegates of the fact that for many, an employee share plan will be their first step into share ownership. Alison Burstall, People Director, Group Reward, at Kingfisher, wasn’t able to attend the conference but in a video that she’d recorded for the event, she highlighted that employee education was a key priority when they launched their 1+1 global share plan. Uptake is a commonly used metric when measuring the success of a share plan scheme but in this instance, they were conscious that the plan wouldn’t necessarily be right for all their employees so building the understanding to enable colleagues to make an informed decision was essential.
For organisations that offer all-employee share plans, part of the challenge around education is reaching those who may not routinely use email. Several speakers mentioned the use of dedicated microsites which enable a flexible approach to communications and provide a central hub for all relevant resources, the opportunity to drip feed information and the ability to adapt content and messaging in response to changes and feedback. The other benefit is that a microsite can act as a useful one-stop-shop to which employees can be directed using paper communications, whether that’s letters, posters or even – as I remember hearing about at the ProShare ‘Celebrating Excellence’ event in April – chocolate bar wrappers!
When discussing participation in share plan schemes, it’s important to consider any potential barriers. Sophie Altaf and Emma-Lou Montgomery of Fidelity International reported on a recent survey undertaken as part of the Fidelity Women in Money Initiative. They found that, when asking why women don’t save more towards their pensions, they reported ‘that having the money to save was a problem, but so was knowing how best to save and having the time to do it.’
These barriers are not necessarily exclusive to females though, and it was highlighted that many younger people in the workforce struggle with the same challenges. The Fidelity research found that many people in these groups would like to have more financial education to empower them to make decisions about savings.
Having spent time considering how to best support employees to participate in share plans, the lively post-lunch debate looked at the question of whether participation really matters. On the one hand, it was argued that it builds employee engagement as colleagues can see real benefits from their contribution to the organisation. Conversely, and perhaps controversially, it could be said that an investment pot would be just as beneficial an alternative, empowering individuals to diversify their investment. Either way, it was clear that providing the right information, education and communication to enable employees to make the right decision for themselves should be central to any employee share ownership scheme.
The great resignation and the workforce
In addition to financial benefits for employees, engagement was a hot topic throughout the day. ‘Quiet quitting’ is a recently coined phrase which is used to characterise employees doing the bare minimum – no longer going above and beyond to surpass expectations. There was some debate about whether this is a real phenomenon and, if so, whether it is symptomatic of a lack of engagement. For some, it may be, but for many it could be a result of a re-evaluation of their work–life balance during the pandemic and a shift in priorities. Either way, Yvonne Smyth, Director at Hays, was supportive of companies making a dedicated effort to reduce the risk of disengagement by understanding what motivates individual team members.
With record numbers of those over 50 leaving the workforce, alongside the cost-of-living crisis driving people to look for jobs with higher salaries to match increases in prices, it’s likely that we will continue to see a lot of churn in the workforce – the worst of the great resignation may be yet to come. It’s vital that companies communicate their whole reward package to their staff, including training and educational opportunities, to make sure that they’re retaining talent within the business; in a talent-short market, they may find that once someone leaves, it could be challenging to replace them.
And nowadays attracting candidates isn’t just about money – culture and values also play a big part in job seekers’ decision-making. Financial support, advice and education can feed into this. Roger Fairhead encouraged companies to revisit their employee value proposition which may need to adapt to post-COVID-19 working practices. Corporate culture suffered during the pandemic, but we now have the opportunity to redefine the relationship between employees and the companies for which they work. Supporting wellbeing – including what Sarah Long, head of New Business at Wealth at Work described as the final ‘tricky bit’ – financial wellbeing is all part of how companies can support and engage their workforce in a more holistic manner.
It was clear that there was real appetite among the speakers and delegates at the conference to take on the challenges of financial resilience, financial wellbeing and financial education. The talks throughout the day provided a huge amount of food for thought and no doubt fuelled much of the buzzy conversation in the breaks between sessions. It was a pleasure to be out, meeting more of our ProShare members, and our thanks go to our major sponsor, Computershare and our digital sponsors, Morgan Stanley at Work. For those who missed the conference, we hope that we will get a chance to catch up with you at the ProShare Annual Awards, taking place on 14 December at London’s Park Lane Hilton. It promises to be an extra special evening, coinciding with ProShare’s 30th anniversary and will provide another wonderful opportunity to celebrate the excellent work taking part in the share plan sector.
Holly Benson, Editor of Governance and Compliance
Find out more about the ProShare Awards here.
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