By Linda Itskovitz, vice president of Marketing for GuideSpark

Today’s hot job market means that companies must find effective methods to entice talented individuals to join their company or risk losing top talent to a competitor. More than ever before, tried-and-true equity compensation programs are proving to be a valuable tool to attract and engage new prospects and employees.

In fact, according to a recent report from Fidelity Investments, a company stock plan is a necessity in order for 40% of respondents to consider changing employers. A full 57% reported that they are more loyal to an employer that provides an equity compensation plan. It’s no wonder, then, that more and more companies are currently offering shares to employees or plan to do so in the future.

It is clear that employee equity compensation plans have moved beyond a simple financial incentive and now are an essential component of companies’ recruitment and retention strategies. Yet educating employees on the value of these complex programs continues to challenge most companies. After all, the programs are inherently complicated and technical, and trying to make sense of them can quickly leave employees feeling overwhelmed and confused.

By focusing on simplifying the concepts related to equity compensation and taking advantage of a variety of communication strategies, companies can increase employees’ perceived value of the program and improve engagement with the company. Provided here are 10 best practices that employers can follow to develop an effective communication plan for their equity compensation program:

1. Gather employee feedback: Business departments don’t operate in a vacuum and neither should a company’s equity compensation planning nor its communications approach. By getting input from employees across multiple functional areas, as well as human resources, legal, and finance, organizations can ensure that their communication materials are clearly and accurately aligned with the needs and expectations of their employees. Eliciting support from company leadership also is essential to promote employee engagement and participation in the program.
2. Determine how to measure success: Before any program is implemented within an organization, it is critical to identify the program’s goals and think about how success will be assessed and measured. For an equity compensation program, realistic goals may be measuring how many participants accessed their account, which plan management tools were used most, or what percentage of employees exercised their expiring options.
   For one global Fortune 100 technology leader, a primary goal was to create effective communications that would minimize the amount of time HR staff spent answering employees’ basic compensation questions. After the implementation of a multi-faceted communication plan, the tech company was able to reduce support calls and e-mails by 30%.
3. Prioritize, prioritize, prioritize: In order to deliver the right amount of information without overwhelming employees, companies need to take a focused look at their equity compensation plan and determine its most critical components. What do employees really need to know to take full advantage of it?
   The topics that bubble up to the top of the list are the ones that should be covered in the communication plan. Some topics for employers to consider communicating include the company’s compensation philosophy, the basics of how the program works and the tax rules that affect employees.
4. Understand the audience: From the outset of communication planning, companies must determine who the target audience is for the equity program. Whether all employees are eligible or only a few select groups, customizing messages to the audience will help the reception and understanding of the program, since people have different information needs, preferences and literacy levels. Regardless of the audience, however, companies should ensure that they are personalizing the information, keeping it clear and straightforward, and avoiding confusing jargon.
5. Give managers more control: Front-line managers are the face of the company for most employees, so organizations should take advantage of this relationship in communication efforts. Give managers the confidence to act as a primary contact for the equity compensation program by providing them training, as well as helping them to gain a solid understanding of the company’s compensation philosophy. By giving managers the support they need to deliver these important messages, managers can help companies optimize their investment in this important program.
6. Communicate the program regularly: With the complexity involved in an equity compensation plan, it doesn’t make sense to limit the communications to once a year. Maximize employee comprehension by scheduling regular opportunities to share information and answer employee questions about the program. Providing relevant communications that are shorter but more frequent can enhance employee understanding and engagement—so consider weekly, monthly, quarterly, and even on-demand messaging.
   For example, when Fortune 500 human capital management organization ADP sought to localize its global bonus framework for its Canadian employees, the company implemented a “Just in time, just enough, and just for me” communications strategy. This involved providing year-round education available to employees anytime, anywhere on any device. As a result, the company reduced HR costs, streamlined processes, and saved significant time by not having to explain bonus mechanics to its staff.
7. Change-up the messaging: People tend to tune out communications that all look and sound the same. Companies can experience the most success by using a wide variety of approaches, including educational, promotional, and informational. To attract the attention of different employees at different times, the content of the communications pieces should vary from detailed plan information to brief reminders about vesting dates or helpful resources. Companies might also take a lesson from their marketing departments, and consider using a themed approach to make their communications more engaging.
8. Vary message delivery methods: Just as the tone and timing of equity compensation plan communications are important, the format is just as critical. These days, employees access content in a variety of ways, from consulting a printed piece to checking plan details on a desktop computer or mobile device. In addition to print and digital communications, companies should provide employees with additional opportunities to learn about the plan, such as in-person seminars or formal team meetings.
   Leading medical device company Boston Scientific recently experienced the benefits of transforming its communications methods, moving beyond outdated materials like 40-plus page slide decks, audio-guided content, and even post cards. Instead, the company implemented a multi-channel strategy including e-mails localized for international employees, QR codes to provide information over mobile devices, and videos played in common areas with closed captioning in the local language. Through this approach, the company saw a 50% reduction in the costs of communicating its employee stock participation program by eliminating post cards while increasing employee education and engagement around equity programs.
9. Take advantage of today’s technology: The proliferation of devices that employees use means that they can access information about the equity compensation plan while at work, at home, or on the go. By leveraging the technology solutions available today, such as video-based trainings, podcasts, and social media, companies can generate more interest and engagement in the program and ensure they are delivering a consistent message. What’s more, digital interfaces can provide a simpler, more effective means of measuring the impact of the communications.
10. Provide employees with more information if needed: Despite a company’s best communication efforts, sometimes employees will still have questions about their equity compensation program. Organizations should help employees gather the information they need by providing resources to help them learn more.

Communicating complicated concepts and information about a company’s equity compensation program does not have to be an impossible task. Companies that can follow a best practice approach to their communications can ensure that their program investment is optimized and their employees’ satisfaction is assured.