Stock Plan Benefits Are a Vital Tool for Employee Retention

While workers aren’t quitting their jobs as rapidly as they were during the “Great Resignation,” the rate at which they’re leaving their employers remains at historically high levels.¹ Higher turnover continues to be a challenge for employers, especially as it appears that the U.S. economy has managed to achieve a “soft landing,”² and recession fears begin to abate.

With this context, employers are looking to every resource available to increase employee loyalty and retention—including employee stock plans. Our third annual Voice of the Participant (VOP) survey finds that such plans can be a key workplace offering for both employees and employers.

This year, we expanded the survey to include input from Morgan Stanley at Work stock plan participants around the world, sending it to more than 2.3 million participants to gather insights and feedback on their stock plan experiences and the value of plan benefits in driving employee retention.

Our findings show that workplace financial benefits remain an important consideration for employees when determining whether to accept or stay at a job. Among those surveyed, 56% of U.S. stock plan participants and 54% of non-U.S. participants said their equity benefits are one reason they have stayed at their company.

However, gaps remain when it comes to equipping workers with the resources necessary to fully utilize those benefits. Fewer than half of workers (45%) said that they knew how to reach someone if they had questions about their stock plan. 

An Opportunity for Employers

Employers can make their benefits even more valuable to employees by offering personalized educational programming that they can access to make more informed decisions about their equity benefits. Only 38% of U.S. stock plan participants and 49% of non-U.S. participants said they understood the impact of taxes on their stock plan benefit. That’s significant, given how tax treatment has the potential to materially impact the net value of equity to workers.

In addition, 38% of U.S. stock plan participants and 41% of non-U.S. participants said they understood how to potentially maximize the financial benefit of their equity, according to the survey. However, workers did appear receptive to workplace programs that could equip them with the knowledge and skills to improve their own financial security. When asked whether they’d attend educational programming on certain topics, 69% of U.S. plan participants said they were likely to attend a session on equity fundamentals, making that the most popular topic. Retirement ranked second, with 67% of participants saying they were likely to attend such a session, and advanced investing ranked third, with 64%.

These results affirm the findings of our State of the Workplace Financial Benefits Study, which showed that competitive workplace financial benefits have only grown in importance as financial stress has emerged as a key concern for employers and employees alike. Equity benefits—offered alongside educational programming—represent a powerful tool that could give employers a competitive advantage when it comes to improving retention and growing loyalty among their workforces.

Employers who help employees understand and use their equity benefits may find themselves with not only a more financially empowered workforce, but one that’s more engaged and loyal as well. Download the report now.