Boost ESPP Participation with Smart Education Strategies

Just like other equity plans, an employee stock purchase plan (ESPP) can be a powerful part of the financial wellness benefits that your company offers to its employees. Unlike stock options and restricted stock units, however, employees must actively choose to participate in an ESPP.

Not only must employees enroll in the plan, but they must also agree to contribute funds through payroll deductions. None of this will happen if employees don’t understand the plan and its benefits. That makes promoting your ESPP critical to its success.

In this blog entry, we’ll share tips for developing an ESPP education campaign to grow participation in your ESPP.

A Successful ESPP Education Campaign Begins with Goals

Your ESPP education program should be managed like a project—with deliverables, goals, and deadlines. The first step is to evaluate your current ESPP participation rate, set a target for improvement, and track progress after each purchase period. Without a clear target, ESPP education risks falling behind other initiatives.

When setting goals, ask whether your priority is to:

• Encourage more employees to participate in the ESPP, or
• Increase contribution levels among current participants.

The answer will help you define your target audience for promotional materials.

You may also have secondary objectives, such as reducing employee inquiries about the plan or helping HR leverage the ESPP as a recruitment and retention tool. Involving other stakeholders—such as HR and finance—can help shape a shared vision for ESPP success. With collaboration, stakeholders may even include ESPP messaging in their own communications.

Know Your Participants to Grow Your Participants

Before finalizing your education strategy, analyze which employees are—and aren’t—participating. If some employee groups show lower participation, consider targeted outreach to uncover the reasons.

ESPP Participation by Wage Level

An obvious starting point is wage levels. Do lower-paid employees participate less than higher-paid employees? Begin by comparing those below the median wage to those above it, then drill deeper. Significant differences may indicate financial barriers that discourage participation.

Additional Demographics

In addition to wages, examine ESPP participation by age, gender, ethnicity, and region:

• Younger employees: If rates are low, use communication tools that resonate with this group—videos, text messages, social media, or internal collaboration tools.
• Employees outside the United States: Lower participation may reflect language, cultural, or economic barriers that require tailored solutions.

Overall Participation

If participation and contributions are low across the board, including among higher-paid employees, this could signal issues with either plan design or how the plan is communicated.

Develop a Plan to Promote the ESPP

Next, strategize the tools you’ll use to promote the ESPP. Remember, your ESPP is only one of many benefits competing for employee attention. To succeed, your communication plan must stand out. For tips on effective messaging, see the NASPP article “Better Emails and More.”

Go Beyond Email

Email remains the most common way to promote ESPPs, and it should be part of your strategy. But supplementing emails with other tools can make a big difference.

According to the NASPP/Deloitte Tax 2023 ESPP Survey companies that use multiple communication methods report higher participation rates. The most commonly used channels include:

• Employee website (85% of respondents)
• Email (78% of respondents)
• Employee presentations, live or recorded (78% of respondents)
• Third-party websites (50% of respondents)
• Video/audio recordings (39% of respondents)
• Internal collaboration tools, such as Slack or Teams (29% of respondents)

Other options include text messaging, social media, and even printed materials. Ironically, in today’s digital world, your messaging might face less competition for employees’ attention in their actual mailbox than in their email inbox.

Choose the channels that align best with your workplace culture. For example, if your company uses Slack or Microsoft Teams extensively, these can be excellent platforms for ESPP promotion. But if these tools are part of your culture, you’ll want to consider other channels.

Evaluate and Refine Your Strategy

Launching your education program is only the beginning. Continuous evaluation is critical. Start by revisiting your goals—are you meeting them? Do they need to be adjusted?

It’s also important to assess the effectiveness of specific communication tools:

• Emails: Do they lead to more employees accessing resources and enrolling? If not, revise your messaging. See “Attention All Employees” for an example of one company does this.
• Metrics: Track email open and click rates, presentation attendance and duration, and video views.

For more insights, check out the NASPP Conference session “Metrics that Matter: Smarter Equity Communications” which explores how participant behavior and demographic metrics can help shape more effective ESPP education strategies.