There are many reasons for your employees to participate in an employee stock purchase plan (ESPP) —from the potential tax benefits to the valuable savings opportunities. Yet, the percentage of employees participating in their company's ESPP remains low. Drawing on a recent study by Computershare and Aon that looked at ESPP participant behavior in the marketplace for 115 different companies in 186 different domiciles, overall ESPP participation across all domiciles is only 11.32%.
Low participation in a plan can stem from several factors, including ease of enrollment, lack of knowledge about the plan and an overall understanding of it. Regardless of cause, the primary goal in offering an ESPP should be strong participation in it.
By converting employees to plan participants, your company is promoting broad-based employee ownership. This will result in numerous benefits for both your company and your employees, including more satisfied and engaged employees.
Best Practices for Boosting Participation
The first step in increased participation is simply reaching your employees and getting them enrolled in the plan. Here are best practices for increasing participation in an ESPP that have been successfully used by our clients:
Embrace online enrollment
Online enrollment not only improves efficiencies and eliminates unnecessary paperwork; it is guaranteed to maximize participation. A major perk when choosing to use online enrollment is that your system is linked to your administrators. When your participants enroll or submit their re-enrollment information, the data is now housed in your administrators system. Plan participant enrollment numbers become available at an instant and the collection of data and information becomes so much easier. Our clients who are using online enrollment saw participation in their plans increase by 4% in just 11 months last year.