Ercan Demiralay FCCA explains how the Enterprise Management Incentive (EMI) can help business owners reward their best employees.
What's the one common issue impacting on most organisations and business owners?
Your people! Specifically finding good quality employees and then keeping them in your business. Your staff are crucial to your operations and customer relationships. That means their knowledge and experience is vital to the day-to-day running and future success of your enterprise.
If you’re in charge of a fast growing business or anticipate an upcoming period of expansion, you may find yourself standing on unsteady ground when it comes to your employees. Thankfully there may be a solution in the form EMI options.
What danger does growth pose to retaining your best staff?
For small businesses, growth can be very exciting and also very challenging. As you expand so your organisation will become harder to manage and run. You'll likely have taken on a lot more work and customers but with finite resources to manage them. This in turn will place greater demands and thus potential stress on both you and your employees.
The danger being your staff could soon feel overworked and not in control of their destiny in the workplace. If this leads to anxiety on their part then it may only be a matter of time before they look for new, exciting opportunities with the prospect of advancing their career and earning more money at a larger competitor. Unfortunately for you, replacing them could take a lot of time and prove expensive.
How you can incentivise your key employees with EMI shares
What can you do about this? You may for example, be in the middle of a fast growth phase but have yet to see the impact of this on your cash position. How can you reward key staff with a bonus or salary rise when you aren’t yet in a financial position to do so?
Thankfully there is an answer to these problems in the form of EMI share options. The below infographic explains how an EMI scheme works and the benefits to both employers and staff. Of note, this is particularly relevant to organisations with plans for a future sale or flotation. Click the infographic to enlarge.
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This post was created on 05/01/2015 and updated on 04/02/2020.
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