Switching Equity Plan Providers During Macro Uncertainty

Granting equity awards can constitute a significant business expense. However, if employees don’t understand the value of what they’re receiving, the awards may not have their full impact—and companies may end up spending more in the future to attract and retain top talent.

Amid the current environment of tightened hiring and budgets, transitioning to a new equity plan provider may present an opportunity to enhance the communication of equity value to employees, especially through comprehensive education initiatives. Ultimately, by fostering a better understanding of the long-term worth of their equity, companies may have the potential to reduce the costs associated with employee attrition and talent acquisition.

Exploring and transitioning to a new equity plan provider may require an initial investment, but it could prove to be a valuable decision if it ultimately helps your company save time, budget and resources.

One crucial aspect to consider when assessing the potential impact of a new equity plan provider is their commitment to continuous improvement. Advanced features, such as workflow automation and integrations with HRIS and payroll systems, could enhance the efficiency of plan administrators, allowing them to allocate more time toward engaging participants effectively.

Additionally, you may want to consider the level of flexibility offered by an equity plan provider. During times of market turbulence, if your company intends to adjust its equity compensation strategy, a new provider may offer greater agility than your current provider.

Retraining a team on a new system can be a challenging endeavor that requires careful time and resource management. It is important to assess a potential new provider’s commitment to offering robust training and support.

To address this challenge, consider looking for a provider that offers comprehensive training programs tailored to your company’s needs, including educational modules, tutorials and documentation, to ensure a smooth transition and minimize disruptions. Additionally, consider their level of support during the migration process and any ongoing assistance for plan administrators and participants.

By choosing a provider that prioritizes effective training and ongoing support, you could streamline the retraining process, optimize resources and minimize the time required to get your team up to speed on the new system.

The process of transitioning to a new equity plan provider often entails transferring a substantial amount of data from one system to another. This task can consume significant time and resources, particularly when dealing with disparate sources of information.

To streamline the data migration process, it could be beneficial to seek a provider with prior experience in handling similar migrations alongside clear documentation, dedicated migration and implementation specialists, and proven mapping tools. For example, features like application programming interface (API) facilitate seamless integration between your systems, including external vendor platforms and internal applications. By utilizing APIs, the need for extensive manual extraction and digital transfer of data between multiple disparate platforms could be greatly reduced.* This automation could significantly accelerate the data transfer, transforming the process from days to minutes, or even seconds, with minimal involvement from plan administrators. 

When considering a switch in equity plan providers, it’s natural for internal concerns to arise. To address these concerns and make an informed decision, effective communication and transparency are key.

One effective approach is to start by engaging with your internal stakeholders and teams involved in equity plan management. This includes holding open discussions to understand their concerns, gather feedback and address any questions while also utilizing a potential stock plan provider for support. For instance, Morgan Stanley at Work initiates each new prospective relationship by conducting a thorough preliminary meeting. This meeting serves as a platform to understand your company’s objectives, challenges, equity types issued to participants and long-term goals. We then develop a tailored plan to outline how we could help address your company’s specific needs, reduce costs and enhance operational efficiencies.
 

This transparent approach could arm you with the tools and resources needed to build support among internal stakeholders, navigate potential challenges and arrive at an informed decision that aligns with your company’s objectives.