Employee Stock Option – Top Benefits Of ESOP

There are many multinational companies and non-multinationals who want to keep their talented workforce for long. It is very important for a company’s survival in the most competitive labor market. Traditionally, the employee stock option plan was available to the top company executives. But, this trend now has changed and is accessible to general workforce in each firm. In today’s article, we are going to discover, top 3 advantages of using the employee stock option or ESO for your organization, and a few other considerations out there.

High Retention Rates & Improved Employee Loyalty

The best ways to retain the indispensable members of the staff is providing them an option of buying shares in a company. When any employee have the stake in a company, they have the sense of control & belonging in a company. 

Next, having ESOP improves loyalty & overall productivity among the staff. Employee sees an overall growth as well as success of a company as their own success. It is not just because they will stay at the job for long, but financially they will benefit from their company’s growth.

Higher Company Benefits Package

To have an employee buy plan in place improves company’s benefits package, and without any additional benefits expenses to an employer. There are some employees who see it as the channel to have a stock in a company. And company’s benefit package, ultimately is aimed in helping the employees to retire comfortably. When they’re confident in a company option getting offered, most of the employees are highly confident in investing over other securities that are offered by a company.

Financial Training

The financial management training isn’t something that you will find in a lot of companies for the employees. But, with the employee stock option, company stands the higher chance of providing personal training to the staff. It’s very important that the participants completely understand pro & cons of having the stock options in a company.

Certain Considerations

The Employee Stock Option Plan or ESOP, will be highly beneficial to employer & employees, considering above discussion. So,  having said this, it is very important that the employers sit with the financial advisor & company lawyer to draw out the balanced program. The program that takes an interest & direction of a company to heart and creative sense of pride among employees for having various options in a company. For example what’s being offered, over what point does employee qualify for having options in a company stocks and what type of stock options and plans are available, must be documented & thoroughly thought about So, these are a few consideration to make when taking a big step.