Fewer than one in 50 UK employers expect to employ any staff on employee shareholder contracts, according to latest XpertHR Benchmarking research. The controversial shares for rights scheme – under which employees of small organisations can trade some employment rights for shares – came into effect at the start of September 2013. At the time of its launch, “the Department for Business [...] admitted that no companies had expressed an interest in the policy” when the scheme was launched, according to press reports.
Small minority of employers plan to use employee shareholder contracts
The XpertHR survey suggests that few UK employers have warmed to the concept of employee shareholder contracts since their launch.
When asked whether their organisation planned to employ any staff on employee shareholder contracts, only 1.7% of UK employers surveyed by XpertHR said “yes.”
This is among the findings of the 2013/2014 XpertHR Benchmarking survey of private-sector pay prospects. Subscribers to XpertHR Benchmarking can drill down into the complete findings of the survey, to see how their organisation compares.
UK employers taking a critical view on employee shareholder contracts
Separate research from Irwin Mitchell suggests that many UK employers are taking a critical view on employee shareholder contracts, Workplace Savings and Benefits reports.
The study found that three quarters (72%) thought that using the employee shareholder contract would make recruitment more difficult.
Over half (55%) said it would have a negative impact on employee retention while 22.9% said they thought this type of conduct would be a hindrance to good employee relations.
Update 1: “[T]ake up of employee ownership status is feeble,” says @seanjones11kbw
The take-up among UK employers of the new employee ownership contract status is “feeble,” says specialist Employment Law Silk Sean Jones in response to the XpertHR data reported above.
Sean tweeted the following response:
“Once you factor out those using it as a tax dodge for senior execs, take up of employee ownership status is feeble.”
UPDATE 2: Employee shareholder contracts are a “daft idea,” says CIPD CEO Peter Cheese
CIPD CEO Peter Cheese has tweeted his response to the XpertHR Benchmarking survey findings on UK employers’ apparent lack of interest in the new employee shareholder contract status.
“Only 1.7% of emps plan employee shares for rights programs http://bit.ly/1iek0KM . No surprise, always said it was a daft idea”
More on the employee-shareholder status from XpertHR and Personnel Today:
- FAQs: Employee-shareholder status
- Employment law manual updates: employee shareholders
- Employee-shareholder contracts: five things you need to know
- Miliband says Labour will scrap shares for rights scheme if they win 2015 UK general election
XpertHR Benchmarking data on private-sector pay prospects for 2013/2014
- Pay forecast benchmarker
Download the XpertHR private-sector pay forecast benchmarker spreadsheet and answer the questions to create a printable report on how pay awards at your organisation compare.
- Pay prospects 2013/2014 (1): Approaches to pay Setting and Pay prospects 2013/2014 (2): Pay settlement forecasts
Subscribers to XpertHR Benchmarking can drill down into the complete results data from this survey and generate bespoke reports on how their organisation compares.
- XpertHR survey of pay prospects 2014: Subdued settlement levels to continue
Detailed written analysis.
UPDATE 3: The #HR and #ukemplaw communities react
There’s been a lot Twitter debate on the findings of this XpertHR Benchmarking survey findings on the apparent lack of appetite among UK employers for the new employee shareholder contract status. I’ve updated the related Storify with all the latest tweets: