Professional March 2019


workers feel valued, the landscape is changing. Hazel Leighfield, head of solutions for technology consultancy Sopra Steria, explains: “A short time ago there was a real trend towards ‘novelty perks’ such as office slides and pool tables, but there’s now widespread realisation that, in order to engage workers long-term, employers must offer an environment that nurtures wellbeing and recognises capability.” Employee engagement is key. Workers should feel as though they are true stakeholders in the business. To this end, it is conducive to link their performance and reward directly with the success of the organisation. An effective method for this is the introduction of share schemes (see case study). The organisation’s culture and ethics are also significant factors in breeding employee engagement and retaining talent. “Employees need to know that the organisation has a clear and meaningful purpose that resonates with staff and is clearly communicated, says Ordever. and vision, and even have an ethics committee. He says: “The changing environment will demand companies let go of their ethos-driven old-world management style and develop ethical thinking at the core of the employee base. This means there has to be an open dialogue of all stakeholders.” If this can be achieved, Zeitelhack concludes that “your future employees will come towards you”. Employee share ownership has been a key feature of employee engagement company Reward Gateway since 2008, when the first employee share plan was launched. Since that date, 5% of the company’s share value has been held among employees. The first plan was the vision of Helen Craik, the company’s founding HR director. Robert Hicks, Reward Gateway’s group HR director, says: “Helen believed that for us to be successful, we needed every single member of Alexander Zeitelhack, associate dean at Berlin School of Business and Innovation at (BSBI), believes all companies should publish their mission Case study – retaining employees through share ownership

staff to be connected to the company’s performance. Share ownership is a core foundation of our employee engagement strategy at Reward Gateway.” From 2008 to 2010, the Season One employee share scheme ran until the company was acquired by Inflexion Private Equity, which bought a majority share in Reward Gateway for £25 million. At that point, around ninety staff members owned five per cent of the business between them and shared just over £1,000,000. For those who had just joined the business and fell outside of the bi-annual share allocation, Reward Gateway ensured they received a bonus, calculated on how many quarters they had been with the company. “We needed to make sure everyone felt a part of the success that came with the acquisition,” says Hicks. The second employee shares scheme followed, from 2011 to 2015, and again held five per cent of the company’s value. As with the previous scheme, all staff were in the scheme with different levels of shares depending on seniority and responsibility. Additional shares were allocated depending on performance and the individual’s contribution to the business. “The importance of this cannot be understated,” says Hicks, “as while we firmly believe that all employees should be a part of the share scheme, there has to be an incentive for employees that go above and beyond. We delivered a very successful investment for Inflexion and achieved nearly three times our target.” The Season Two share programme

ended in 2015 when Reward Gateway was acquired by Great Hill Partners on an equity valuation of £140m. Some 269 employees, below board level, were members of the programme on that date and they shared between them £6,500,000. Employees were eligible whether they were based in the UK, Australia, USA or Bulgaria. Reward Gateway staff in Macedonia, who cannot legally be members of the programme, instead benefited from a bonus equal to the amount they would have received from the share programme had they been in it. “The third employees share scheme is the one we’re in right now, and naturally we’ve made a few improvements to it based on what we’ve learned since 2008,” says Hicks. “One of these improvements is the vesting of shares. Shares are vested (or earned) over a period of four years following the date of the share award. “This is important because if an employee leaves Reward Gateway before an exit event, they get to keep shares that have vested as of the date they leave. We want to reward our employees for the contribution they’ve made to the business, and also make sure that the people in the business are here for the right reasons, and not because they’re waiting for a share pay- out.” Hicks summaries: “When integrated with wider reward and recognition programmes, a share scheme can be a powerful tool in building employee stakeholders, and we’d strongly recommend it to others.” n

| Professional in Payroll, Pensions and Reward | March 2019 | Issue 48 40

Made with FlippingBook - Online magazine maker