Every year, around 400 of the best and most successful U.S. companies vie against one another to make it onto Fortune’s list of the ‘100 Best Companies to Work for in America’.
In addition to the prestige of being named in the announcement via the well-respected magazine, inclusion also enables companies to attract better talent as well as retain and motivate current employees.
Silicon Valley companies are fighting especially hard for new talent and to retain in-house expertise, according to Sheila Frierson, president of Plan Managers, North America, at global share plan provider Computershare.
“Companies want to understand whether their benefit programs match or even exceed those of competitors,” Frierson said.“They are especially minded to take good care of high-performing executives, and an increasing number want to ensure that all of their employees feel that they own a stake in the company’s future.”
A recent joint survey between Computershare and WorldatWork revealed that 59% of HR teams are increasing the amount of time they spend on the financial well-being of workers.
This perhaps isn’t surprising given that the cost of recruiting, training, and integrating new employees means that many HR and people departments are under pressure from management to reduce turnover.
Our research based on applicants to the Fortune “Best 100” list conducted with the Great Place to Work Institute in San Francisco indicates that employers who combine a generous equity plan with an empowering culture can cut voluntary staff turnover by a third — from 18% to 6%.
By contrast, 15% of employees without access to equity plans and a supportive corporate culture say they are likely to leave their jobs during the next six months.
But our analysis also revealed something else: companies with more extensive employee ownership and profit or gain sharing schemes had higher scores on The Great Place to Work Institute’s Trust Index, which is based on workers’ views of their company’s corporate integrity, respect, pride and camaraderie.
Companies with more extensive equity plans and the most supportive corporate culture had the highest scores, especially those with plans that create profits that add significantly to annual salaries. A recent study by Arizona State University suggested that workers participating in Employee Stock Purchase Plans can be on average $3,000 a year better off: the equivalent of a 5.4% wage increase.
Creating a participative culture
Public opinion surveys, studies and other research published over the last four decades also have consistently suggested that it’s not just about giving workers more access to money via equity. Successful companies often combine equity plans with participative cultures that enable employees to play a role in their future as well as encourage employees and managers to co-operate over the long term.
Consistent with an early study by the General Accounting Office of the U.S. Government (now the Government Accountability Office) which initially found that productivity increased more in employee stock ownership plans that were combined with a supportive culture, our recent research strongly confirmed once again that companies that offer equity plans in combination with a supportive culture and participative work practices still have the biggest payoff when it came to reduced turnover and higher equity return.
Read the rest of Joseph Blasi and Douglas Kruse’s article here at Employee Benefit News
