When companies develop benefit packages to attract top talent and remain competitive, they have to consider the right mix of the rewards employees want most. These days, offering benefits like a pension plan, and medical and dental coverage are almost expected, especially among companies of a certain size.

As a human resources leader, you need a way to develop effective programs that attract and engage the employees you need now — and in the future — to support every aspect of your talent strategy. An employee share purchase plan (ESPP) can help you do that.

If your company doesn’t currently have an ESPP in place, you should know there are good reasons to offer one to employees. Here are seven reasons why.


1. Better employee performance

We conducted a study in conjunction with the London School of Economics1 to determine if there was a difference in employee performance among those who participate in an ESPP versus those who do not. We found that those who participate in an ESPP:

  • work longer hours
  • are absent less frequently
  • are less likely to quit
  • express greater job satisfaction

In other words, offering an ESPP can lead to a more engaged, more valuable workforce.

2. Attract and recruit top talent

Benefits like a pension plan and medical coverage are baseline benefits that hardly make you stand out against the competition among job candidates. Offering one could make your company more attractive, to help you land top recruits and deliver on your people priorities.

3. Create an ownership culture in your company

An ESPP is the easiest and often most cost-effective way for employees to purchase shares in the company. When employees are also owners, they have a greater stake in the success of the company, which can be a powerful motivator and reduce turnover.

4. ESPPs are a broad-based, cross-border benefit

An ESPP is one of the few benefits that can be made available to all employees, including employees in countries outside Canada.

5. Increase employee savings

Saving rates in Canada continue to be a problem. According to the 2019 BDO Canada Affordability Index, 53% of Canadians are living paycheque to paycheque.2 But with regular, automatic payroll deductions and share purchases, an ESPP can help employees to save more. And they can typically access that capital if the need arises.

6. Offer TFSA and RRSP options

In addition to your ESPP providing a savings vehicle for employees, your company can include tax-free savings account (TFSA) and registered retirement savings plan (RRSP) options as part of your ESPP. The funds employees contribute can be allocated to these types of accounts, a tax efficient way for them to invest in company shares.

7. Raise capital

Where the ESPP mandates shares are issued from treasury, the regular payroll deductions from participating employees provides a steady cash flow to the company. This benefit is a good one to share with your CFO when making the case for an ESPP.

[1] Computershare Share Plan Survey (2014)
[2] BDO Canada Affordability Index

Ready to start your own ESPP?

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