Why Equity Compensation Planning Capabilities Are Beneficial for HR Teams

Equity compensation benefits are one of the top ways employers can compete for talent and drive employee engagement and retention. Often when employees leave their employer, they cite pay as a primary contributor. To encourage employees to stay at the company long-term, many employers offer incentives such as equity compensation as a part of their total rewards package.  There are different types of equity compensation that employers typically offer, but some of the most common are: Restricted Stock Options (RSUs), Employee Stock Purchase Plan (ESPP), and stock options (ISO and NSO). The value of an employee's vested equity over time can be more than what the employee might earn at a new company that’s offering a higher salary.

When an employer decides to offer an equity compensation benefit to their employees, most often the management and implementation of this program lies solely on the shoulders of HR teams, who may have limited resources. Without the proper support, HR teams are faced with challenges such as the inability to scale and provide a personalized experience for all their employees; employee retention issues; limited resources; low employee benefits utilization; and risk factors when answering financial and equity compensation-specific questions from employees.

Here are some of the ways employers can benefit by partnering with a total financial wellness solution provider with an equity compensation planner capability.

Leverage a scalable and comprehensive solution 

Understanding equity compensation is complex. With a digital solution paired with human financial planners, employees can receive personalized support for their equity compensation benefit.

Through a digital equity compensation planner capability, employees can self-serve and easily track the value of their equity, view the potential value over time, while understanding when their company’s trading windows are open or closed. Employees can also receive ongoing education on the fundamentals of their equity compensation. Furthermore, when equity compensation is integrated into a total financial wellness plan, employees can view their finances holistically and identify opportunities to achieve their financial goals.

If employees need further support and have specific questions unique to their financial situation, having access to Financial Planners is helpful. Financial Planners provide advice on topics such as how to optimize the management of their equity compensation; discuss any tax implications in the U.S.; and how to maximize their equity through investments that help them grow their wealth. This enables HR teams to save time spent answering frequently asked questions and avoid the risk of providing advice that exposes the company to risk.  

Ability to drive employee retention 

Studies show 75% of employees who received education and advice were more confident about making decisions regarding their equity compensation. With the right resources and tools, employers have the opportunity to boost employee engagement and productivity. By providing the right support, employees are empowered to make financial decisions that are likely to motivate them to stay longer with the company. They are able to realize the value of their equity compensation and the positive impact it can have on their financial lives and overall well-being. As a result, employers are likely to see increased appreciation and utilization of their equity compensation benefits from their employees.

Support HR teams with employee education 

According to BrightPlan’s 2022 Wellness Barometer Survey, only 13% of employees have basic financial literacy, and the vast majority are looking to their employers for support. However, HR teams historically have limited resources to assist their employee population in understanding their equity compensation programs.

To free up time and resources for HR, an equity compensation planner solution should provide access to relevant articles and videos from certified and fiduciary financial planners who have deep expertise in their employer-provided benefits. 

Increase benefits utilization

With the ability to have a better understanding of their equity compensation, employees are  more likely to actually use the benefit.  As employees vest more of their equity, they are more likely to be motivated to engage with the financial wellness resources their employers provide to help them improve their overall holistic financial wellness.

Minimize risk and protect your company and employees

Employees may have many questions regarding their equity compensation that HR isn’t fully equipped or legally allowed to answer. Providing employees with access to Financial Planners who have deep expertise in equity compensation can help employers mitigate risk and enable employees to better understand the nuances of their equity compensation. 

Read more about BrightPlan’s Equity Compensation Planner in this press release.