Are you undervaluing your part-timers?
Recent media coverage has highlighted the growing number of part-time staff in the UK. This had naturally awoken certain questions as to why, and how should employers adjust to accommodate this?
Whilst it is important to recognise that the situation of an individual taking on multiple roles out of financial necessity makes up a portion of this demographic, it by no means accounts for everyone, and, in many cases, part-time employment is often a choice. Many people choose part-time employment as it offers them a good balance between their working and private life. Keeping an extra day or two a week free can allow individuals the time needed for volunteering, or pursuing sporting or academic interests. Also, caring responsibilities of children, the elderly, or the sick can govern the choice to opt for part time.
The idea that part-time members of staff are not as valuable as full-time employees is a common misconception. For example, many companies may have a part time accountant who is integral to the development and safeguarding of the company. Surprisingly perhaps, there is evidence (see related links below) that part-time employees are actually far more productive than their full-time counterparts.
Some employers only offer discretionary share incentives and in making their selections often overlook employees who are not working full-time. The most enlightened employers will wish to also reward and provide long-term incentives for their key part-time employees, but may find doing so more problematic than expected.
So how can part-time staff be rewarded in the long term?
Besides salary increases or cash bonuses, one option is to implement a Company Share Option Plan (CSOP). A CSOP provides a tax efficient and highly flexible way to reward selected employees, managers and directors. Options can be awarded over the shares of UK private or listed companies, and also over the shares of foreign parent companies. Each employee can be granted options to buy company shares worth up to a total of £30,000 at the date of grant.
The CSOP is open to part-time employees (although any directors participating must be full-time directors) without any prescribed working time requirements. This is a significant feature as it enables part-time workers undertaking insufficient hours or with too many part-time roles to meet the Enterprise Management Incentives (EMI) working time criteria (at least 25 hours per week or, if less, at least 75% of available working time) to still receive a tax favoured equity based reward.
For this reason, you may say that the CSOP supports lower paid employees as it opens participation to part-timers and is an option plan, not a purchase plan, so funding any exercise can be deferred until such time as share sale proceeds are guaranteed and therefore there is no investment risk for participants.
If your part-time employees have key knowledge and skills and are amongst the most productive workers in your staff then do not overlook them for equity rewards. For more information on CSOPs, EMI, or any other share scheme, please contact Liz Hunter via Liz.Hunter@rm2.co.uk, or call in directly on 020 8949 5522.
Is part-time employment beneficial for firm productivity?
Annemarie Nelen, Maastricht University, Netherlands - (Annemarie Nelen, Andries De Grip, Didier Fouarge, 'Is Part-Time Employment Beneficial for Firm Productivity?').
Doing more with less? Flexible working practices and the intensification of work
Clare Kelliher, Cranfield University, UK ('Doing more with less? Flexible working practices and the intensification of work', Human Relations 2010; 63; 83 originally published online Dec 1, 2009; Clare Kelliher and Deirdre Anderson).