After the introduction of the Accountable Capitalism Act last year, many organizations are starting to explore different ways to offer their employees a stronger voice, more business equity—essentially, more “skin in the game.” Many start-ups have already been offering their employees shares and stakes in their company for years because they don’t have many other benefits to offer those employees.
But should you make your employees company shareholders or offer them votes on your organization’s board?
Here are some benefits to making your employees direct shareholders or stakeholders in your organization.
Aligns Employees’ Interests with the Financial Interests of the Organization
Typically, regular employees aren’t that involved in business decisions related to an organization’s overall financial health and wellness, and their everyday habits can end up costing a lot of money.
Their everyday work output will prove this, as employees become more relaxed with company-related expenditures and resources and won’t always consider costs in everyday operational decisions when those decisions don’t directly affect how much money they’ll earn at the end of the month.
However, if employees understand that when the company saves money every day it earns them more money, they are likely to be more cognizant of the money and resources they use to complete work projects and tasks. They will always be aware of the financial interests of the organization, regardless of their roles and what they do.
Produces More Engaged Employees with Higher Productivity Rates
When employees have literal stakes in the success of their organizations, they’ll work harder and be more engaged on an everyday basis at work. They’ll know that the amount of work they put in will be relative to the amount of money that they’ll earn.
What’s more, when employees have more of a direct and vested interest in an organization and its output, they’re less likely to leave the organization because it will represent the fruits of all their labor, hard work, and career interests. So, organizations that offer employees company shares will also see much lower attrition rates.
Builds Stronger Branding, Reputation, and Company Relationships
Organizations that offer their employees company shares will notice that their brand will build a much more positive and long-lasting reputation across their industry and that it will become a hub for a lot of important business relationships that are both internal and external to their organization. Why?
Because employees who are company shareholders feel directly responsible for their company’s image and brand. So, they will handle their stakeholder relationships and external partnerships or client relationships with more care and consideration, as if their livelihoods depend on them.
At the end of the day, if you make your employees shareholders, you’re offering them more responsibilities and increasing their productivity rates, while also increasing your organization’s positive reputation and bottom line. So, it’s at least worth considering.