ESOP - How It Can Help Close the Talent Gap & Resolve Shortages

July 26, 2022
By Cara ChatellierJuly 26, 2022,

Woman arranges blocks that spell benefits, representing ESOP perks for businesses

Do you want to more successfully hold onto your employees and stay ahead of competitors? Then consider enrolling in an employee stock ownership plan (ESOP). Today, there are over 6,500 ESOPs that cover nearly 14 million participants, according to the National Center for Employee Ownership (NCEO). They offer a great way for businesses of all types to solve issues around the current talent gap and talent shortage felt across nearly every industry. 

What Is an ESOP?

ESOPs, or employee stock ownership plans, are employee benefit plans that provide perks for businesses, business owners, and employees alike. They involve selling at least a portion of a company's shares to ESOP trusts. This trust then has ownership of the shares on behalf of the company's employees. Employees benefit greatly from ESOPs, and the company normally funds all ESOPs. That means employees don't need to pay anything toward them. 

As the company contributes funds to the ESOP through the repayment of a loan, all employees will gain access to shares on a non-discriminatory basis. 

The Benefits of ESOPs for Employers and Employees

There are a couple of key benefits of ESOPs that make them worth implementing for both employers and employees. These include the following:

Increased Employee Retention

One main advantage of ESOPs is the ability to increase employee retention. This is due to the fact that employees gain more ownership of the company. Offering this level of ownership to employees can go a long way in attracting and retaining employees amid the current talent shortage.

According to Deloitte, talent supply has a huge impact on various aspects of employment. For example, it can inspire organizations to invest more in reskilling. Employees may also use the talent gap to seek change in either their careers or employers. Meanwhile, businesses might take the opportunity to use technology in innovative ways to supplement their workforce. Additionally, talent supply helps determine how companies may use interim talent to acquire the workforce they need when they need it. 

Ultimately, keeping talent has become more difficult than ever, making interim talent one of the best ways for businesses to fill the gap. This is because of the "war between talent" that Deloitte describes. In a future where workers struggle amid talent shortages, they'll likely wind up fighting harder to secure a limited number of jobs. In turn, the relationship between employees and employers will grow increasingly impersonal. As such, employees will worry more about the competition than they will about the potential connection they'll have with an employer.

This kind of environment will make introducing ESOPs and hiring interim talent critical for organizations of all types.

Companies Gain a Competitive Advantage

With the help of an ESOP, employers would be able to attract top talent while also showing that they value their employees. This can help businesses stand out from competitors that aren't offering these opportunities. You'll be attracting more and better talent while making employees feel more invested in the company. Ultimately, the result is increased retention and overall satisfaction among employees.

Consider Interim Talent When Needed

While an ESOP may help attract new talent, you need to make sure you get the talent you need. If you can't find the right talent for your organization, you can fill the gaps with interim talent. This can help simplify the hiring process and get the experience you need for a particular project. As a result, you'll be able to shorten the amount of time it takes to onboard a new employee along with the project timeline. While hiring new full-time employees can benefit your business in challenging times, short-term interim talent can be just as beneficial.

To get started on hiring interim talent and gear your business for success, contact MetaExperts™ today.

About Cara Chatellier

Cara Chatellier is a digital marketing strategist & content writer. She lives in the Boston area and has worked with MetaExperts since October 2018. She loves travel, wine tastings, and podcasts.

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