Microsoft’s 2022 Work Trend Index shows 41% of the global workforce is likely to consider leaving their current employer within the next year. Dubbed globally as “The Great Resignation”, workers are looking for better conditions, more engaged teams and a greater sense of purpose.
At the same time, the cost of hiring is rising. The latest research has found the average cost of recruiting has doubled in some parts of the world. And it takes at least a week longer to recruit someone than it did 12 months ago.
In many cases, it has become harder – and more expensive – to find and hire new people than it is to retain your current employees.
With these figures in mind, the importance of employee engagement simply can’t be underestimated.
The hybrid engagement juggle
Remote and hybrid work has become the preferred way of working in Malaysia, with 77% of workers indicating they want flexible remote work options to stay. In response, 62% of business leaders are considering restructuring their office to suit a hybrid team.
Employers are under pressure to provide an exceptional experience for their people, wherever they may be: in the office, at home or working from the local cafe. Achieving this is becoming increasingly hard when people are not physically together or even working the same 9 to 5 schedule.
3 ways to encourage employee participation in the hybrid world of work
When we’re not physically together, many leaders are left wondering how to encourage employee participation.
Here are three key ways to keep employees connected and engaged, wherever they may be.
1. Bridge the physical and digital worlds with technology
Having reliable technology in place to enable collaboration and efficient work processes is fundamental to creating an efficient and frictionless employee experience. The last thing you want is for your people to be dealing with frustrating technology issues when they could be making progress on real work.
Automating repetitive tasks and introducing self-service portals empower people to take control of simple tasks, like booking their own leave, accessing payslips and updating contact details. By optimising the user experience with easy-to-use applications, simplified central logins and cloud-based systems, your employees will be able to immediately access and update their data from anywhere, at any time.
Consider streamlining your core functions like payroll, finance and HR to free up your people to focus on collaboration and engagement-boosting activities.
And, of course, having platforms in place to enable collaboration is crucial. Make sure you are set up for what Google refers to as “collaboration equity“. That is, ensuring everyone can contribute and communicate equally, regardless of location, role, experience level, language or device preference.
2. Prioritise wellness
While hybrid working undoubtedly has its benefits, it also comes with some downsides.
We’re seeing a blurring of boundaries between work and life, a weakening of social bonds with colleagues and a greater push for productivity from employers. And this is causing high levels of burnout, which has an impact on not only employees but businesses as well.
Analyst firm Gallup estimates employee burnout costs USD $322 billion in turnover and lost productivity globally.
The good news is that companies that prioritise employee wellbeing are being rewarded with more productive and engaged employees.
Companies that adopted key wellness initiatives such as stress management initiatives, adapted workplace design and financial education saw employee loyalty improve by 79%.
3. Reward your team
Being paid on time is vital. And people’s experience with pay directly impacts how they feel about working with an organisation.
If people have continual issues with your current systems — for example, difficulty accessing payslips or being unable to update important details — you might want to look into how to fix this problem. Having a system in place to make sure your people get paid accurately and on time will ensure they are motivated and engaged. And that’s whether you choose to implement a payroll solution or outsource your payroll to professionals.
Optimising your software applications to benefit your employees and simplify their day-to-day operations, will ultimately give them more control and empowerment in their role.
Mechanics aside, how much you pay people also matters.
The cost of living is rising steadily, and employers need to keep pace with rising costs of food, petrol and living expenses to make sure their people are taken care of.
If you have limited funds to pay bonuses or increase salaries, an alternative is offering employees a stake in the company in the form of shares or stock options.
Offering equity in the company means employees start seeing the business in a different light. Rather than simply clocking in and out and completing tasks, they begin to think of how to move the business forward in a meaningful way and increase revenue.
Equity can come in many forms, but leading companies in Malaysia are adopting employee stock option plans (ESOP).
What is an employee stock option plan?
An employee stock option plan (ESOP) gives employees the opportunity to purchase company shares at a future date for an agreed price. An ESOP differs from an employee share award plan in that it gives employees the option to buy shares instead of simply enabling them to purchase those shares outright.
Because ESOPs give employees financial benefits when the company performs well, they are more likely to be invested in the long-term success of the company.
There are many benefits of offering an ESOP for both employees and business leaders.
ESOPs help employees:
- feel valued and rewarded because they are being compensated for their efforts
- improve their financial position through dividend payments and profit from selling shares
- gain a sense of part ownership in the company they work for, which means they are more likely to be satisfied and less likely to join their peers in “The Great Resignation”.
And for companies, ESOPs enable them to:
- reward high-performing employees without impacting cash flow
- attract higher-quality talent
- enhance retention and loyalty
- enjoy sustained growth and increased company performance.
How ESOPs work
Setting up an ESOP can be a complex procedure. In Malaysia, there are specific rules and regulations as well as tax implications, so it’s important to get help from experienced professionals who understand the local landscape.
There are several administrative processes required to effectively implement and maintain an ESOP, including:
- offer management
- vesting management
- participant information record-keeping
- participant liaison regarding plan mechanisms
- leave management
- regulatory reporting.
Other important considerations to think about are:
- How long it takes for an individual’s share to be supplied to them over the course of their employment.
- How long an employee needs to stay before the ESOP ‘kicks in’. Also known as the “cliff” or “lock-in” time, it’s important to consider how much equity to give early employees in case they leave with your shares in hand without adding significant value to your organisation.
Of course, an ESOP is not the only option for offering employees equity in your company.
Other options include:
- performance share plan (PSP)
- restricted share plan (RSP)
- share appreciation rights plan (SARP)
- phantom share plan.
To figure out which is right for your company, you’ll need the help of trusted professionals to examine different setups and scenarios before going ahead.
Cut the complexity with a global strategy
Incentivising your employees with ESOPs is an effective way to boost engagement and productivity. But it is not without its complexities, especially if your presence stretches across the Asia-Pacific or globally.
And with the trend of remote and hybrid working looking set to continue, who knows how far and wide your people could reach?
Each country will have different regulations and options for offering ESOPs, so it’s important to partner with someone who understands the intricacies of local regulations to ensure you are compliant.
Just as there are many benefits of consolidating multinational taxes with one agency, there are benefits to consolidating your employee stock options across multiple jurisdictions.
- Mitigating risk: having a team of professionals that understands not only Malaysia’s laws but those across the entire Asia-Pacific region can help your business mitigate risk when it comes to offering equity.
- Improving employee experience: streamline your correspondence with a share management platform that provides timely and clear communication, in multiple currencies and languages, across the region. This ensures everyone on the team, globally, has the same level of access, understanding and experience of the information at hand.
- Reducing administrative burden: implement efficient, automated processes and a single point of contact to ensure you receive clear and consistent communication across your locations.
At BoardRoom, we use leading technologies and a panel of experts to guide you through implementing and administering your ESOP. Our team of experienced professionals have in-depth knowledge of the local Malaysia regulations, as well as regional and international experience.
Wherever your employees work, we’ll be able to support in the implementation and on-going administration of your employee stock option plan to ensure they remain engaged and loyal for the long term.
Speak to our team of experts today to get started on implementing an ESOP in your company.