Page 32 - Chartered ONE – Issue 26
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PROFESSIONAL SERVICES FINANCIAL
The Response of Employee Share Schemes
to Covid-19, Civil Unrest and More
David Craddock is a recognised authority in the UK and worldwide on employee share schemes. In his book, The Tolley’s Guide to Employee Share Schemes, David shares his expertise drawn from over 35 years as a practitioner in the subject to explore and expound upon the many aspects of employee share ownership with practical application that is grounded in a comprehensive understanding of the relevant laws and regulations and a profound insight into how to maximise the employee share scheme initiative to the benefit of the company.
  EMPLOYEE SHARE SCHEMES AS A GROWTH-ORIENTATED SUBJECT
The enduring strength of employee share schemes lies in its flexibility to respond to any set of economic circumstances, based upon an understanding of the human instinct and
the capacity of the human condition to first survive, then improve and in time to prosper and find victory. Faced with a contraction in the UK economy of some 25% and the worst economic situation for 85 years, the motivational incentive that employee share schemes is proven to ignite must be the instinct that the government appeals to at this low ebb in the country’s history. The evidence accumulated over some 60 plus years from universities, institutes and businesses in the USA and the UK supports this position. The subject of employee share schemes has demonstrated itself to have a perennial fascination among politicians of all persuasions and a permanent relevance to solving economic conundrums through the facilitation of an incentive-based economy.
The debate has already started to rage about whether this is the time for higher taxes in order to repay the borrowing that has funded the parachute for Covid-19 or, alternatively, the time for lower taxes which will avoid putting extra burden on individuals and businesses seeking to recover and already burdened by depressed markets and borrowing of their own. Employee share schemes
answers this question by offering an economic system that promotes growth that is based on higher levels of productivity and enhanced profitability.
The answer, therefore, to the
tax question is that employee share schemes facilitate lower tax rates through the more-than compensating economic growth that this unique motivational share incentive generates. To embrace employee share schemes, therefore, is to recognise that taxation reduces the efficiency of the economy and that growth is required to emerge intact from the current predicament.
THE CURRENT ECONOMIC AND SOCIAL PREDICAMENT First, businesses must get back to work which can only be achieved through education on how to live with the prevalence of Covid-19 in our midst. The practice of social distancing, diligence over all aspects of personal health and hygiene and protection for the vulnerable
and those advanced in age
can be assisted by government guidelines. However, ultimately, it will be the exercise of personal responsibility by each-and-every individual citizen that will combat the onset of this pernicious
virus and rid the threat of its consequences from our land!
Here again, the subject of employee share schemes plays its part: an employee share scheme, properly implemented and communicated, fosters personal responsibility in
the workplace, encouraging disciplines that reinforce the entrepreneurial spirit within employees and which can
be replicated in the home
and in social settings. Always the employee share scheme
will produce its best when accompanied by human resource policies that encourage responsibility. Notable among these polices is delegated decision-taking through self- regulating quality management, proactive management by employees of company health
and safety procedures, company commitment to training and development and approaches to performance management that revolve around employee participation.
As witnessed through daily media reports, the national and, indeed, international predicament now extends beyond Covid-19 to serious questions about racial discrimination, the nature
of policing and civil unrest, homelessness and mental illness, all undoubtedly exacerbated
by the frustration of lockdown with the pent-up feelings
that enforced isolation and confinement brings. Add to
all that the spectre of mass unemployment and many of
the challenges of the 1970s
and 1980s have once again raised their ugly head! As then, the very economic survival
of communities has become threatened. Now is the time
for government to reflect
and to reassess its economic strategy and its plans for social harmony. It is the case, though, that employment economics
in the modern era represents
a complicated subject that is impacted by many interacting variables. Partly through
Brexit and the retreat from globalisation, with the trend to organise world economics into regions, and partly through the growing mistrust of China as a consequence of the origins of Covid-19, the return to our shores of supply chain companies may act as a positive force in creating new employment opportunities.
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