With London 2012 upon us the time has come to watch the most elite athletes surpass seemingly insurmountable odds. Yet whilst they cannot choose the country they represent, or often which sport they have an almost supernatural gift in, there is one indispensable decision that goes almost unnoticed, the coaching staff. That is not to say that in every case it is the athlete that selects their coaching team or the other way around, the field is made up of a combination of the two. Although it is not usually thought of in this light, this process reflects everyday recruitment procedure.
Firstly, you need the right knowledge to recognise talent early on. Often a young and aspiring athlete will not know their worth or their potential, and in some cases, maybe not even their sport! But the right understanding and direction can put them on the track to success. Take Zoe Smith who was on track to be a gymnast. It wasn't until age 12 when asked to make up team numbers did she take up weightlifting.
The core stage of an athlete's development is the training. The coaching team will work tirelessly with the athlete, perfecting their craft and honing their skills, in order to give them the best possible chance when competing. However, success is not just a victory for the athlete, but the coaching staff too. Much like a company training up an employee to become the best in their industry, they work towards the same goals for mutual gain.
So what happens when the athlete peaks and starts receiving wider recognition?
Naturally, many athletes stay loyal to their coaches whilst they are getting the rewards they feel they deserve. However, with potentially more beneficial options now open to them, the athlete's temptation could become the coaching team's reality. It has been reported Britain's double European champion and now Olympic Gold Medallist Mo Farah moved to the United States in a bid to enhance his career ambitions, parting company with coach Alan Storey. Farah's new location is Oregon where he will work with Alberto Salazar, who won three successive New York marathons.
So why do top athletes change coaching team?
Simple, to maximise their chances of receiving the recognition they deserve. This is directly comparable with the problems faced by many SMEs today. Too often, key members of staff leave the employer that has developed their talent, and advanced them to a recognised figure within their field. What strides are you taking to try and retain your most talented professionals and keep your team competitively advantaged?
There are a variety of methods when considering the best ways to recognise the value of top talent. One of the most successful and effective options would be to implement a share scheme. Share schemes provide financial reward for employees that show drive and commitment to push their company over the finishing line. They are also a fantastic way of eliminating the problem of alienating or allowing key employees to feel unappreciated, as they ultimately become part of the business. Another advantage of share schemes is their versatility; they can be tailored to suit corporate objectives. The most common tax-efficient share schemes are Enterprise Management Incentives (EMIs), Deferred Share Purchase Plans (DSPPs), and Share Incentive Plans (SIPs).
Team EMI - Enterprise Management Incentives
The Enterprise Management Incentive is a highly tax-efficient method for providing targeted incentives to key employees or employee groups. It is structured as an option scheme, whereby an employee is granted the right to purchase company shares in the future at a price set at the date of grant. The employee benefits financially when the company has raced to the completion of its targets and the value of the shares rises above the purchase price.
Team DSPP - Deferred Share Purchase Plan
Under a DSPP, the shares are purchased outright for a small initial deposit. The remainder represents an unpaid balance payable on the shares. This will be paid up on the occurrence of a defined event, such as flotation or a trade sale. Assuming the shares have risen in value, the participant will then be able to pay up the balance on the shares and take the profit with gains treated as capital gains and not as a benefit of employment, resulting in a substantially lower tax rate on any realised profits.
Team SIP - Share Incentive Plan
Share Incentive Plans are highly tax efficient method of providing incentives in the form of company shares. All employees must be offered the chance to participate, but can be subject to a qualifying service period of up to 18 months. The value of awards allocated to eligible employees can vary in proportion to salary, length of service and hours worked.
At RM2, we specialise in helping employers retain their talent through equity rewards. If you would like to speak to us about how this could work for you then call us on 020 8949 5522 and ask to speak with an advisor.