Blue Ridge ESOP Associates Industry News

Communicating Your ESOP

Posted by Blue Ridge ESOP Associates

May 22, 2017 3:50:52 PM

Puzzle Teamwork.jpgFor many companies, it’s time once again for the annual distribution of ESOP participant statements. Are you ready to make the most of the opportunity? Unfortunately, many firms miss this great chance to build ESOP knowledge and engage employees as owners.

If you want to enhance your ESOP’s power as a recruitment, retention and employee engagement tool, the statement is a great place to start.  After all, your firm is investing significant amounts of money to provide employees with a retirement benefit. If you’re not informing them about how your ESOP benefits them, you’re missing a great opportunity.

Here are three practical ideas to make more of your annual statements:

1) Include ownership information and a “how to read the statement” handout with your mailing
Include a read-the-statement handout (Blue Ridge can customize one for you) and some basic plan information with your mailing.  Include a short letter from the President and last year’s plan highlights.

1) Communicate  important information directly to employees
2) Assist with understanding statement details
3) Educate employees and their spouses about the benefits of your ESOP

Information sent home, let’s face it, is often read by the employee’s spouse. Including the read the statement handout in your communication enables you to educate the spouse, who may know little about your ESOP. When an employee is considering another position, wouldn’t it benefit your company if his or her spouse knew about your company’s ESOP benefit? Wouldn’t it help you if the spouse asked whether the employee will receive something similar to the ESOP benefit at the new, potential employer? You bet it would. The only way that can happen is if you make an effort to educate spouses. Inserts included with your annual ESOP statement are a great way to reach spouses and significant others.

2) Hold a webinar to review the annual statement and ESOP results
To educate employees about ESOP benefits, some firms hold webinars that walk people through what happened last year and how to read and understand their annual ESOP statement. Some firms hand ESOP statements to participants during the webinar so employees can follow along with the presentation highlights.  Because we all learn through repetition – and hearing once a year about the ESOP doesn’t anchor knowledge – most companies follow up the webinar by mailing or emailing additional information about their plan’s features and benefits. The more often we hear something, the more likely we are to remember it. ESOPConnection is a great tool for follow-up communications.

3) Hold live meetings to build ESOP and business knowledge
Many ESOPs take employee engagement to the next level by holding live meetings to communicate what happened to employees’ ESOP accounts during the last year. These can focus on the ESOP or include both employee ownership and business information. Companies make them “annual shareholder meetings.” They discuss whether the company met its business goals, compare performance against budget and share information about what drove the change in stock value. These sessions enable employees to develop a “big picture” understanding of the business and what they can do in their daily jobs to positively impact stock value, rather than going into the minutia of detailed business numbers.

No matter what you do, remember to make the most of the opportunity your annual ESOP statements provide. They create an “itch” about your ESOP. It’s up to you to scratch it in a way that educates people about your plan’s benefits and engages employees as owners.

Written by Jim Bado, Workplace Development