Been offered shares in the company you work for?

You don’t have to go far to notice many businesses in New Zealand are struggling with staff shortages, and some are also suffering from staff retention. In some places, like in the construction sector, there's cases of apprentices being enticed and poached to move employers.

Offering valuable staff a slice of the company pie, is one solution employers eager to keep their staff, are considering. It can be a win-win situation for the company as well as the employee.

As an employee, what should you consider before making a decision?

First up, when you’re offered shares in the company, they don’t tend to come free! You need to purchase the shares, but normally the agreed amount of shares / percentage of company, will be offered to you at a lower price than if you bought them on the open market.
C Sharelisting
Secondly, is being aware that this offer normally has a time restraint on it, in regard to selling the shares. For example, most employers would stipulate that you need to keep the shares for at least 12 months before you can sell them. This prevents you buying the shares, selling them straight away for your own potential personal gain, (and possibly walking away from your job).
Thirdly, is making sure you protect yourself and de-risk the situation. It’s recommended that if you have shares in the company you work in, that they make up only ‘part’ of your investment and retirement portfolio, but not ‘most’ of your investments and savings. This minimises the effect should something happen to the company, and you lose your job and (some) of your savings, rather than having all your savings being tied up in the shares.
Finally, being involved in an employee share plan can make you approach work differently. Employers hope, (and in many cases this tends to be true), that employees will have more accountability for want they do and feel more personally connected to their job and company, given they have some ‘ownership’ of where they work.

Beneficial Experience

Let’s be honest…not many people, especially in today’s economic climate will have money sitting around to purchase some shares. That’s where we come in. Rapson Loans & Finance has worked with an increasing number of people in a similar situation, who have come to us having been offered shares. We work alongside you through this process, completing the calculations and paperwork required, to top up your mortgage to cover the cost of the shares.
If you’d like to top up your mortgage to pay for shares in the company you work, please get in touch. One of the team, can guide you through this process.