Skip to the main content.

Manage your portfolio with ease and evaluate potential investments.

The platform is fully synced with Companies House, to provide you with accurate, real-time insight.

Meet with Vestd

manage iconManage

Add your investments for complete visibility of your shareholdings. View cap tables and detailed share movements.

organise iconOrganise

Organise investments by fund, geography or sector, and view your portfolio as a whole or by individual company.

scenario iconModel

Explore future value scenarios based on various growth trajectories, to figure out potential payouts.

streamline iconStreamline

Remove friction and save time. Action shareholder resolutions via DocuSign, access data rooms, and get updates from founders.

SPVs iconSPVs

Set up and manage new SPVs without leaving the platform, then invite co-investors to fund and participate.

capterra rating
guide-thumbnail
The Joy of Enterprise Management Incentives
Read our free guide to the UK's most tax-efficient share scheme.
Get the guide

4 min read

Solving the UK recruitment crisis: How share schemes can help

Solving the UK recruitment crisis: How share schemes can help
Solving the UK recruitment crisis: How share schemes can help
7:05

All is not well in the employment landscape. The persistent twin challenges of recruitment and retention are casting a long shadow over business of all kinds. 

Against a backdrop of economic volatility, shifting societal norms, and outdated policies, many organisations are grappling with exactly how to go about attracting and retaining talent to sustain growth and competitiveness - all while drawing from a relatively small and shrinking pool of highly specialised candidates.

You may be wondering, how has it come to this?

The current state of affairs: a labour shortage dilemma

The Office for National Statistics paints a stark picture of the UK's labour market, with nine million individuals aged 16 to 64 classed as economically inactive – that’s a huge pool of untapped potential.

Excluding agriculture, forestry and fishing, there’s a huge disconnect between the number of unemployed people and the number of job vacancies.

The latest ONS data says the ratio is currently 1:6. The consequences of this shortage ripple across industries - hindering productivity, innovation, and economic growth. In short, it leads to stagnation.

Policies and attitudes towards working parents in the UK have long been criticised for their inadequacy and inflexibility. The departure of working mothers from full-time employment due to childcare challenges and workplace rigidity is greatly exacerbating the labour crisis.

Full-time job or full-time parent?

Research reveals 85% of women leave full-time work within three years of having their first child due to inflexible work environments and the high cost of childcare. While some return to work on a part-time basis, it’s often in less skilled roles. Around 19% of women don’t return at all.

More research by action group Pregnant Then Screwed shows that mothers are twice as likely as fathers to seek flexible working arrangements after parental leave - and they don’t always find a solution that allows them to stay in work.

This exodus not only deprives businesses of valuable talent, but also perpetuates gender inequality and stifles economic potential.

The question of care

Another segment of workers who are often locked out of the workforce is that of working carers - people who balance work with their duty of care towards elderly, ill, or disabled family members.

Around 40% of caregivers are considering leaving their jobs due to caregiving pressures, further depleting the talent pool. According to the organisation Carers UK, an average of 600 individuals do just that each day.

These losses don’t just hit staff retention rates. They also erode workplace morale and cohesion: losing an established team member can see business knowledge depleted. It can impact productivity, efficiency, and may strain customer relationships.

It can also sow the seeds of discontent, with remaining employees required to take on extra responsibilities to plug the gap. Then there is the question of recruitment, along with the financial cost and additional resources required to train the new hire to an acceptable standard.

Unhappy employees find it easier to leave

MHR's 2024 Employee Experience Report highlights a concerning gap in employers' approaches to understanding workforce morale and satisfaction.

Just 25% of businesses conduct regular employee satisfaction surveys, meaning they could well be in the dark about what’s prompting team members to leave.

This lack of satisfaction could also have a knock-on effect on recruitment, with disgruntled employees able to share their satisfaction online, via social media and through platforms such as Glass Door.

So, what can be done to not only attract talent, but keep it? How do you convince good candidates to not only choose your business, but stick with it?

As well as taking wellbeing seriously and allowing flexibility where needed, there is another simple and highly effective incentive option: share schemes.

The failure of employee benefits to address employee needs

HR leaders across the UK lament the poor uptake of benefits due to a disconnect between workplace offerings and employee expectations.

A survey of 500 UK HR Directors reveals that almost half attribute low benefit uptake to a lack of interest, indicating a failure to align benefits with employee needs and priorities.

This discrepancy demonstrates the urgent need for businesses to reassess their benefits strategies and prioritise offerings that are in line with their workforce’s expectations.

In an era where employee wellbeing and job satisfaction are paramount, it’s impossible to understate the significance of tailored and impactful benefits packages.

The recruitment and retention crisis facing the UK necessitates innovative solutions tailored to the needs of the modern workforce.

Share schemes have the potential to be a powerful antidote to the challenges of recruitment and retention, offering a win-win solution for businesses and employees alike.

The rise of share schemes as a recruitment and retention tool

Share schemes are a cost-effective incentive with multifaceted benefits. By granting employees a direct stake in the company's success, share schemes foster a sense of ownership and alignment of interests, driving motivation and increasing loyalty.

In short, if the employee has a stake in the success of the company, they’re more likely to care whether it succeeds. It becomes their business, too - more than a job that can be swapped for a different one at the drop of a hat.

Share schemes are also known to serve as a powerful tool for attracting talent - particularly among younger generations like Gen Z, who prioritise tangible benefits in their job search.

Efforts to enable share ownership by simplifying setup procedures and increasing participation among low earners are making share schemes more accessible and inclusive.

You get loyal employees, and employees are rewarded for their loyalty - it’s a win-win situation!

Beyond individual benefits, share schemes contribute to broader economic growth and productivity by incentivising retention and fostering a motivated workforce. That drives innovation and competitiveness.

Our research suggests that share schemes could generate a £2.4 billion boost to the UK economy if 250,000 more businesses participated. This makes share schemes the ideal benefits package for the wider economy as well.

As the UK hopefully charts a course towards recovery and resilience, leaving behind times of deep economic turmoil, the adoption of share schemes represents a strategic investment in both human capital and economic prosperity.

Interested? Book a free, no-obligation consultation with one of our share scheme specialists to learn more.

Meet with Vestd
Recruitment and retention tips for startups in 2023

Recruitment and retention tips for startups in 2023

We’ve just made it through one of the toughest years for the economy on record, but what does 2023 have in store for us and how will it affect...

Read More
How startups can retain talent and reduce employee turnover

How startups can retain talent and reduce employee turnover

Last updated: 7 June 2024. Why is employee retention so important? Well, companies with a high employee turnover rate spend a lot of time and money...

Read More