Switching Equity Plan Providers during Macro Uncertainty

Introduction

In the unpredictable economic landscape of 2024, businesses around the globe are grappling with the complexities of managing equity plans. The Plaza Group at Morgan Stanley maintains that fostering an ownership culture within companies can cultivate significant benefits—both for organizations and their employees. This philosophy, however, is reliant on two vital principles:

Empowering employees to feel invested in the company and their own financial success helps attract and retain top talent.

Efficiently administering a global equity plan supports equity initiatives while managing growing costs.

Re-evaluating Equity Plan Providers

Should your current equity provider fail to meet these expectations, it could be time to take the leap and switch providers. Despite the financial strain and heightened economic uncertainty, conducting a thoughtful examination of a new provider’s abilities can guide you in making an informed decision about whether to proceed with a provider switch.

Internal Stakeholders are Key

A sensible starting point is to involve your internal stakeholders and teams responsible for equity plan management. Facilitating open discussions helps you understand their uncertainties, gather feedback, and address possible questions—with the guiding hand of your potential equity plan provider. Companies like Morgan Stanley take an active approach to this process, beginning each client relationship with a comprehensive initial meeting. This sets the foundation for outlining a tailored plan aimed at meeting your business’s unique needs and goals—potentially helping reduce costs and improve operational efficiencies.

Maximizing Return on Investment with a New Provider

Transitioning to a new equity plan provider offers a prime opportunity to enhance communication with employees. Comprehensive educational initiatives can foster a better understanding among employees about the long-term value of their equity—potentially saving companies’ costs associated with talent acquisition and employee turnover.

Targeting Efficiency Gains

Implementing a new equity plan provider does require an initial investment, but the potential return in enhanced efficiency and resource allocation might make it a worthwhile choice. When evaluating your options, pay attention to features like workflow automation and HRIS and payroll integrations that a new provider might offer. Improved efficiency among plan administrators may free up more time for effective participant engagement.

Support for System Retraining

Retraining your team on a new system not only demands time and resources, but also a potential provider’s unwavering commitment to comprehensive training and support. A provider that offers tailored training programs and ongoing support can help expedite the retraining process and optimize resources. This can also cut back the time required for your team to become proficient on the new system.

Transitioning to a New Equity Plan Provider

Addressing Data Migration Concerns

Moving a substantial amount of data between systems can be a daunting task that consumes significant resources. To alleviate this burden, engage a provider with prior experience in similar migrations. Efficient data mapping tools and seamless integration between your systems via application programming interfaces (APIs) can drastically cut down manual data transfer time, require less involvement from plan administrators, and speed up the transition process.

Communicating Openly to Make an Informed Decision

When debating a switch in equity plan providers, addressing internal concerns with open and transparent communication is key. Engaging with your internal stakeholders and teams, and gathering their feedback and addressing their questions can build confidence within your organization. With prudent planning and a supportive provider, you could unlock a host of benefits in organizational efficiency and employee satisfaction.