Another year is winding down which means another set of New Year’s resolutions looms. In addition to hitting the gym more often, why not resolve to make the most of your ESOP in 2015? After all, you’re contributing hundreds of thousands if not millions of dollars to your company’s plan. What’s been your ROI (return on investment) on those contributions? If people don’t understand the ESOP, your plan has not been a good tool for retention, recruitment, improved productivity and building a high-performance company. That’s a very low ROI. Would you invest millions in new equipment, technology or software and not educate people about the benefits of using it? Of course you wouldn’t.
Here are a few things you can do to make the most of your company’s investment in employee ownership in 2015.
- Develop an ownership objective
What do you want your ESOP to accomplish? What do you want people to understand about it? What behaviors would you like people to exhibit as owners? What does employee ownership mean to your company and ESOP participants? Slow down, take a deep breath and think about what you want to achieve.
- Build a plan to get there
Once you have your goal(s), how are you going to reach them? What specific things will you do to make the most of your investment in employee ownership? When will you do those things? How will you measure the effectiveness of your efforts? Remember the sage words of Louis Carroll as you build a plan: “if you don’t know where you are going, any road will get you there.”
- Scratch the normal itches
As you implement your plan, remember to scratch the normal itches. In other words, take advantage of communication opportunities associated with your annual ESOP cycle, like benefit statements, the new stock valuation, ESOP month, distributions to retirees and diversification elections.
- Market, market, market
If your ESOP is just a once a year event, people will forget about it, no matter how great your annual meeting (for example, who played in the Superbowl last year? Who won? What about in 2013?). To get more out of your ESOP, you’ve got to discuss it more often and link it to company and employee success. Anything less than once a quarter means you won’t get much out of your ESOP investment.
- Remember it’s a marathon, not a sprint
The ESOP is a long-term benefit plan, not a short-term, get-rich-quick scheme. Your communication, education and ownership culture goals should match the plan’s long-term nature. An ESOP Communications Committee, new participant orientation, building leaders’ skills to manage owners, sharing performance metrics, written and email communications and developing an ownership culture are investments in your company’s success.
Bottom line: if you’re not investing time and energy educating participants about your plan, your ESOP contribution ROI will be pretty dismal. Resolve to make the most of your ESOP investment in 2015 by taking some proactive steps now. And when December 2015 rolls around, you’ll be glad you did.
Contact Jim Bado at email@example.com or 419-427-2435 to learn how to make the most of your ESOP plan.