Young employees want stock plan benefits
Workplace flexibility and financial security like student debt repayment programs are some of the benefits Generation Z and millennials value the most — but employers who want to impress millennial workers should also consider equity compensation.
Younger employees view stock plan benefits differently than older generations. More than half of employees under age 35 (57%) agreed that stock plan benefits are an important consideration when changing jobs, compared with 46% of baby boomers, an annual survey by E*TRADE, an online broker for stock trading, mutual funds, and retirement planning, finds.
Companies such as T-Mobile, Capital One and Lowe’s are all offering employees the option to participate in stock purchase plans, and they are part of a growing group of employers who provide equity compensation and stock plans.
Benefitfocus, a cloud-based benefits management platform and services provider, began giving employees a chance to own a piece of the company with a stock program benefit.
More than 1,400 full-time employees received a one-time restricted stock unit in April, currently valued at about $2,000, according to the company.
“Associates are more cognizant of how a benefit-focused company operates from a financial perspective,” Jeff Oldham, senior vice president of global and institutional markets at Benefitfocus, said in January. “Folks are now going to take greater responsibility because they are now a shareholder.”
Freshpet, a New Jersey startup that seeks to disrupt the pet food industry with high-end dog food, also decided to offer stock ownership as part of its benefit package.
The cat and dog food manufacturer says it will grant its full-time employees equity in the company beginning next year. The restricted stock units will be distributed annually to full-time hourly employees who have worked at the company for at least a year.
One of the reasons younger employees have an outsized interest in stock plan benefits is their strong conviction in their companies. When asked why they hold on to shares, 35% of young workers said it’s because they believe in the company’s future performance, compared with only a quarter of the 55+ crowd.
“Now more than ever, the younger generations that make up today’s workforce want to feel connected to their company and participate in the growth potential,” says Scott Whatley, president of E*TRADE financial corporate services. “There have been dramatic changes in employee perspectives compared to even a decade ago when benefits like equity compensation were not nearly as top of mind and were reserved solely for executives.”
Millennial and Gen Z workers are also interested in more educational information from their stock plan administrators, with 57% citing they would like more educational guides and FAQs, compared with 45% of baby boomers.
“To remain competitive, today’s employers will need to adopt scalable and intuitive solutions to best cater to and reward younger employees,” Whatley says.