According to the most recent ProShare SAYE and SIP Survey, 11% of employees whose Sharesave options were in the money at maturity took no action at all. They had spent three or five years building a gain. The hard part was done. Yet, at the point it mattered most, they did nothing.
That figure sits alongside another important finding from the same body of research: companies with strong communications and high participation rates see measurable productivity benefits. Those without them often don't. Sharesave isn't a benefit that can simply be left to run itself. Companies that invest time in helping employees understand and engage with the plan tend to see far better outcomes than those that don't.
To mark Sharesave's 45th anniversary, I brought together Professor Andrew Pendleton, Emma Parker (Tapestry) and Michelle Murphy (Evelyn Partners) for Optio's recent Sharesave at 45 webinar. Drawing on both academic research and many years of practical experience, they explored what drives participation, why communications matter, and the decisions that can make the difference between a plan that employees simply have, and one they genuinely value.
What the research says
Professor Pendleton's work with Professor Andrew Robinson, using data from the Workplace Employment Relations Survey, provides some of the strongest evidence available on the impact of employee share plans on business performance. The findings are more nuanced than the familiar assumption that employee ownership automatically improves productivity.
Simply having a share plan in place does not consistently improve performance. The greatest benefits come when the plan is supported by clear communications and meaningful employee involvement. When employees understand what the plan is, why the company offers it, and how their own contribution is linked to the company's success, the productivity benefits become much more apparent. Where a plan sits quietly in the background, accompanied only by a standard invite and booklet at launch, those benefits are far less pronounced.
There is, however, an interesting exception. When participation reaches around 70 per cent of the eligible workforce, the research suggests the plan begins to deliver measurable benefits even without other forms of employee involvement. At that point, the plan becomes more than an individual benefit; it becomes part of the organisation's culture.
For most employers, participation sits well below that level. That makes effective communications one of the most important tools available for improving the impact of the plan.
Why the first invitation matters
Research undertaken by Professor Pendleton and a colleague at Melbourne University, using data from Computershare Australia's salary sacrifice plans, identified a striking pattern. Employees who join an annual plan are highly likely to continue participating year after year. Those who decline the initial invitation are much less likely to join in future.
Emma Parker offered an explanation for this. Because contributions are deducted directly from payroll, along with tax and NI, it psychologically does not register as a sacrifice in the way a manual bank transfer would. The money never reaches their current account, so the saving quickly becomes part of normal monthly budgeting.
For plan managers running a Sharesave, this has an important implication: the first invitation is arguably the most important communication in the entire plan cycle. Employees who join at the outset often become long-term participants. Those who decline because the communication was confusing, uninspiring, or simply never reached them, may never engage with the plan again. Investing time in getting that first communication right can have a lasting impact on participation for years to come.
Communications that make a difference
Michelle Murphy, who has managed Sharesave plans at organisations ranging from Sainsbury's to a private professional services firm, highlighted several characteristics shared by successful communications. None of them is especially complicated.
Plain English before legal language. The legal documentation is, of course, essential and should always be readily available. However, the material most employees will actually read should explain the plan in straightforward language that makes sense first time. If employees cannot easily and quickly understand the offer, the document needs rewriting.
Visible support from senior leadership. When a CEO or other senior leader openly explains why they value the Sharesave plan, and confirms that they participate themselves, it sends a powerful message. The plan becomes something the organisation genuinely believes in, rather than simply another employee benefit sitting quietly in the background. Emma made a similar point during the discussion: visible senior leadership support changes how the plan is perceived throughout the organisation.
Choose channels that suit your workforce. Email works well for office-based employees but is far less effective for warehouse colleagues, drivers, or shop-floor staff. A QR code displayed in a depot or staff room linking to a clear explanation of the plan may be far more effective than another email. Communications should be designed around how employees actually access information, not simply around the channels that are easiest to produce.
Give maturity the attention it deserves. Launch communications often receive the greatest investment: professionally designed brochures, videos and manager briefings. By contrast, maturity can sometimes be reduced to a standard letter and a portal link, despite being the point at which employees make important financial decisions. The 11% of participants who take no action at maturity are, in many cases, a reflection of that imbalance. Communications at maturity deserve just as much thought and care as those at launch.
Keep communications fresh. A communication written when a plan launches may feel dated three or five years later when it matures. While the core message remains the same, worked examples, design and format should be reviewed regularly to ensure the plan continues to feel relevant and engaging.
Local champions, and the line between informing and advising
For larger employers, local champions, colleagues who participate and are trained to answer questions in depots, branches or on the shop floor, remain one of the most effective ways of supporting formal communications.
Emma also addressed an area where employers sometimes become unnecessarily cautious. Financial advice and financial promotions are regulated activities, so employers cannot tell participants which decision they should make. What they can, and should, do is explain the practical consequences of each option.
A communication or local champion can quite properly explain that if a participant takes no action before a specified date, their option will lapse and they will lose the gain they have built up. That is a statement of fact rather than investment advice, and it helps employees make informed decisions.
"It is absolutely fine to explain the consequences of an action. What you want to ensure is that you are not giving investment advice."
Companies sometimes hold back from providing this level of explanation because they worry about crossing into regulated advice. In reality, clear factual information leaves employees better informed and better equipped to make their own decisions.
Design decisions that really matter
Sharesave is one of the more tightly prescribed employee share plans. The legislation sets many of the key parameters, limiting both the scope to reinvent the plan and the opportunity to overcomplicate it. As Emma observed during the webinar, companies often spend too much time debating plan design and too little considering the employee experience.
In practice, three decisions matter most:
- the option price discount (up to 20 per cent)
- the monthly savings limit
- three years, five years, or both
These are the decisions that shape the value proposition for employees. Much of the remaining design is largely operational.
Two common misconceptions are worth addressing.
Firstly, a sizeable discount is not essential for Sharesave to be attractive. The tax treatment alone, with gains falling within the Capital Gains Tax regime and allowing participants to make use of available CGT reliefs, can make the plan highly valuable even where no discount is offered.
Secondly, Sharesave is by no means limited to large, listed companies. Michelle Murphy successfully operated a plan at Smith & Williamson, a private firm, for more than a decade. Private companies do need to agree share valuations with HMRC, but this is a well-established process routinely managed with the support of specialist advisers.
Taking Sharesave international
The webinar also explored how UK employers can extend Sharesave to overseas employees.
Emma explained that simply offering the UK plan internationally is rarely appropriate. The legislation underpinning UK Sharesave is specific to the UK and can create securities law and tax issues elsewhere.
The usual approach is to develop a separate international plan that mirrors the UK arrangement wherever possible, while allowing for local legal and tax requirements. This may include cash settlement where shares cannot be delivered, withholding mechanisms for local tax obligations and the ability to sell shares to cover tax liabilities. With the right legal and administrative support, these variations are well understood and straightforward to implement.
What separates a plan employees value from one they simply have
One theme ran consistently throughout the discussion. Successful Sharesave plans share a number of common characteristics: communications that are clear and regularly refreshed, a joining process that is straightforward, a participant experience that works just as well on a mobile phone as on a desktop, administration that supports employees through maturity, and visible backing from senior leadership.
None of these things is particularly difficult to achieve. They do, however, require ongoing attention.
The plans that employees value are usually those where companies continue to invest in the experience year after year, rather than treating communications as something needed only at launch.
The Sharesave plan itself has changed remarkably little over the past 45 years. What continues to make the greatest difference is how it is introduced, communicated and supported.
This article is drawn from Optio's webinar, Celebrating Sharesave at 45, a lively discussion with about what makes an employee share plan genuinely work. A write-up can only cover so much, so for the full conversation, including the worked examples and questions we couldn't fit here, watch the complete webinar recording.
If you'd like more on why the plan has endured, read the companion piece, Sharesave at 45: Why It Has Stood the Test of Time.
At Optio, we work with companies to design, launch and administer employee share plans, including Sharesave. If you'd like to discuss any of the themes raised during the webinar, we'd be delighted to have a conversation. Explore Sharesave with Optio.
Murray Tompsett
