If you are an international business that has survived the pandemic so far, there may be opportunity for HR to lead on a project that not only attracts and retain talent but also helps grows the brand.
More than a year into the pandemic, McKinsey has published a paper which sets the scene. It’s called ‘The new possible: How HR can help build the organization of the future’. It’s aimed at businesses with a global presence and the message is, given the pandemic, there is an urgency for a more dynamic talent and work model and HR has a key role to play. They go on to explain how HR fits into the big picture.
They point to research that suggests that ‘future-ready’ companies share three characteristics: they know what they are and what they stand for; they operate with a fixation on speed and simplicity; and they grow by scaling up their ability to learn and innovate. Importantly they say if you are one of the lucky ones that has survived the pandemic - perhaps even grown in the past twelve months - then now is a good time to take a step forward. They warn that there are many business leaders watching on and, understandably, waiting for the pandemic dust to settle before making any big decisions but, they say, few firms can afford that luxury. They’ll get left behind and fail to grow.
So, in practical terms, what is it that HR should be doing? You can read the McKinsey report for yourselves – we’ve put a link to it in the transcript of this programme – and there are a lot of ideas in there, but a theme which chimes with us is around attracting and retaining talent whilst, at the same time, building a global brand identity. So, a project that marries those two objectives.
One way to do that is through an employee incentive scheme which has an international focus and a number of our clients are looking at rolling out this type of plan. It’s a sizeable project, obviously, with a lot to consider, so to help give an overview of what’s involved we will be running a webinar later in May which looks at the issues in some detail. It’s called ‘How to launch and operate your international share plans’ and HR plays a key role in a number of areas.
So, let’s hear more about it with the help of share plans specialist Lynette Jacobs who joined me by video-link from Manchester to discuss it. I started by asking Lynette why this should interest HR professionals?
Lynette Jacobs: “Thank you, Joe. Operating share plan internationally is always a good thing to do. Now more than ever with what's been going on in the last over 12 months now with COVID, it's very important as a way of bringing together employees worldwide particularly, for example, in a case where a company has done some recent overseas acquisitions, global acquisitions, to give the employees who live in those jurisdictions the feeling that they are part of a bigger group and, generally, for large companies where you have people who are based in overseas countries far away from the UK, again, they can feel very remote. This gives them all the same identity by having an award over shares in your company.”
Joe Glavina: “Can I ask you about the timing of this Lynette. Why would this be a good idea to embark on right now?
Lynette Jacobs: “So, again, I'm sorry for harking back to COVID yet again, but many companies now really want to engender that feeling of inclusivity, of moving forwards, we're all coming out to the pandemic, all being well, together. It's definitely a good time now to make that award to your employees. It could be because it's a way of cash conservation because, you know, things have been tough and this might be, instead of a wider pay rise. Alternatively, a very good use for making such an award now would be a way of team spirit, right, we're here, we're back, we're going forwards, here's an award of shares, whether that's a free award or an opportunity to buy shares in the company, perhaps at a discounted rate, and sort of keeping everyone motivated as we all move forward out of the pandemic.”
Joe Glavina: “There is a perception amongst some HR professionals that launching an international plan is expensive. Is that true?”
Lynette Jacobs: “It’s very much about setting your project plan up early, having realistic expectations and ideas of what your company can afford to, and wants, to spend on the project. Working with us as a team, we can advise you, we can we have contacts with lawyers in many overseas jurisdictions, we can go out to them, we can give them fixed costs of what we want to pay them on your behalf or their advice for you. Alternatively, as a way of cost cutting, we can do our own due diligence using a desktop database. That's obviously not specific to your company but, for example, if it's in a country where you've only got a few employees and it's a country that we can tell you we know does not normally have any specific issues, then that may be a way of reducing your costs. We also, I know, Joe, you're going to be speaking to my colleague, Kate, from the wider perspective, we can work with you, our wider team, on project management of the project as a whole, so not just the legal aspects.”
Joe Glavina: “You mentioned timescales. What sort of timeframe are we looking at when it comes to launching a project like this?
Lynette Jacobs: “So, clearly it all depends on the number of countries that you're going to be operating you're plan in. As will be obvious, you will need more time if you're going to be extending it to say 40 or 50 countries than if it’s 2 or 3 and we work with companies who are doing both of those and at all ends of the spectrum. I would say if you're looking for a plan that's going to be sort of 20, 30, 40 countries or more, ideally you want to be trying to project plan it for about six months in advance. In many cases that doesn't happen for various reasons and, you know, we could then do it within three months and sometimes we've had to do it more quickly and having the contacts with overseas law firms clearly helps us to do that for you more quickly. It may be the case that you're going to need to put in place a new plan and if you're a listed company you may well need to go to shareholders to get approval for that. If that's the case, then you need to build that in, that clearly adds on a reasonable amount of extra time.”
The webinar is on 19 May from 11am-12pm and is called ‘How to launch and operate your international share plans’. It will, of course cover the key legal and regulatory considerations but it has a very practical focus with a number of case studies to illustrate the project management side of things and the communication strategies you’ll need to have in place. The project plan is absolutely central to this working well, so we’ll be looking at issues such as whether to use an existing plan or creating a new global share plan, who you offer it to and what the awards will be - so will it be a case of free shares, or options, or perhaps conditional share awards for example? Also, a key point for HR, how you’ll actually communicate the share plan to eligible employees. If you are interested in that you can sign up directly from the website. We’ve put a link to that in the transcript of this programme,
- Link to McKinsey report
- Link to Pinsent Masons’ international share plans webinar