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Perspectives

Stock-based compensation for an increasingly diverse workforce

Driving better engagement and outcomes for today's employees

While demand for stock-based compensation (SBC) remains strong among the early-career, diverse workforce, organizations may consider revisiting their SBC strategy and overall participant experience in light of plan participant goals. Our survey highlights various objectives shaping participation in these programs, each influenced by unique personal narratives and demographic identities. It’s a potential paradigm shift that challenges traditional employer philosophies around SBC, and underscores the need to capture the voice of the specific talent that you are seeking to attract, retain, and motivate. Capturing this voice, and considering the overall employee experience, can help enhance the value of SBC as a tool to meet talent objectives.

Key takeaways

  1. Personal objectives matter: The demand for stock-based compensation (SBC) is high among a diverse workforce of early-career1 employees. But understanding individual narratives can be crucial when adding plan flexibility to benefit all participants.
  2. A diverse workforce embraces SBC differently: Demographic identities play a substantial role in determining which employees embrace SBC- and at what point in their career journey. Employers may improve their ability to attract and retain diverse talent by adapting to these nuanced interests.
  3. Wealth accumulation is a top priority: Wealth accumulation is the primary objective for many respondents. Aligning SBC plans with this priority can be helpful for enhancing employee satisfaction and retention.
  4. Communication challenges persist: Getting the word out about SBC programs via traditional methods can fall short. Respondents often rely on their personal networks for guidance, making it challenging for employers to manage the message effectively. Organizations need to embrace innovative new channels to not only engage a diverse workforce but to underscore the intrinsic value SBC brings to the table.
  5. Informed plan design can improve returns: By reassessing SBC plan designs and administration through the lens of today's diversifying workforce, employers can enhance the employee value proposition and improve the returns on their SBC investment.

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Explore our insights and what they mean for attracting and retaining talent.

Deloitte Tax surveyed a diverse group of 1,750 early-career1 employees who currently are eligible to receive or purchase company stock to understand the importance of SBC in evaluating their total pay package.

View the full report

1 In this report, "early-career" is defined as US employees who have been in the workforce for less than 10 years, with at least a four-year college degree and a current annual income of 50,000 USD or above.

The numbers behind the findings:

88%
88% of those surveyed said equity in the compensation package was a major contributor in their decision to work for their current employer.
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In fact, for 80% of the respondents, even if equity was unavailable as a new hire, their decision to stay with their employer was impacted by the possibility of the future SBC participation.
39%
Creating long-term wealth accumulation is the most common objective, cited by 39% of respondents, to participate in their organization's SBC program.
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Selling the equity to support current cash flow was the second most cited response by participants in an organization’s SBC program.
25%
About 1 in 4 respondents don't understand the value of their equity awards, with respondents looking to their personal networks and confidants instead to fill the training void.
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Organizations may be missing an opportunity to manage the messaging about their SBC plans, but a combination of improved learning strategies, content development, and personal and technology-enabled trainings can help turn the tide.

Get in touch

Discover how Deloitte can help your organization craft an effective stock-based compensation program for an increasingly diverse workforce.

  

Sandy Shurin
Tax Principal, Global Equity and Incentives
Deloitte Tax LLP
ashurin@deloitte.com

Gregory Kopp
Tax Managing Director, Rewards

Deloitte Tax LLP
grkopp@deloitte.com

  
  
  
  

Dhanushki Samaranayake, Ph.D.
Research Manager, DEI Institute™

Deloitte Services LP
dsamaranayake@deloitte.com

Chase Bonin
Tax Consultant, Rewards

Deloitte Tax LLP
cbonin@deloitte.com

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