Now, job vacancies in the UK have soared to an all-time high with over a million positions to fill as of October 2021. This has been driven partly by recovery and reopening of key sectors in the economy, such as retail and hospitality. But it’s been compounded by the number of roles left open by people who have voluntarily left their jobs, in a movement dubbed the Great Resignation. 

There are numerous reasons why people are seeking a professional change. For some, the pandemic prompted a shift in priorities, encouraging them to pursue a dream job, move to a new location or look for a role that makes more room for life outside of work. For many others, the decision stemmed from how they were treated by employers during the pandemic – or even before it. Heightened stress, inflexibility and a disregard for safety, plus a lack of recognition, compassion and development opportunities all combined in the pressure cooker of lockdown, leading to an explosion of workers quitting their jobs as labour market conditions turned in their favour. 

The Great Resignation is still in its infancy, but that hasn’t stopped onlookers from questioning the longer-term effects. In a market where candidates rule, salaries have increased by up to 60% and the hiring process moves quicker than ever, it’s tempting to speculate that candidates who’ve recently resigned from another role could get cold feet once they land in a new business. After a period of economic crisis, it’s thrilling for employees to find themselves at the centre of a bidding war – but with the Great Resignation still in full swing, it’s understandable that hiring managers might be sceptical of their loyalty. Hiring managers now face the challenge of filling a high volume of vacancies, quickly – while doing their best to identify which candidates will be committed to the organisation, despite an abundance of competing offers as the economy bounces back.  

While startups might not always be able to compete with corporations on salary or brand prestige, they can be much more agile and creative with the methods they use to win over top talent. Unlike large organisations that might harbour outdated attitudes and find new initiatives stalled by red tape, startups embraced flexible hours, remote employees and an experimental attitude to work perks as a way to differentiate themselves from traditional employers, long before COVID-19 arrived. 

Employee equity schemes are perhaps the most powerful method of all. Not only do they bolster compensation packages, but they could help address the root cause of the Great Resignation and encourage staff to stay longer in subsequent roles – without a pandemic keeping them put. Here’s why every startup should offer share options. 

1. Equity seriously boosts the value of your benefits. Of course, you can’t claim every employee will become a startup millionaire, but for people who join successful ventures at an early stage, equity can transform their financial standing. Upon a sale or IPO, it’s not uncommon for equity windfalls to run into tens (or hundreds) of thousands of pounds: perhaps enough to put down a house deposit, pay off debts or provide startup capital for a new business idea. The ultimate value of someone’s equity could be several multiples of their salary. 

2. Equity increases engagement. Looking at the factors playing into employees’ decision to leave, it’s clear that many stem from internal cultural issues that were present before the onset of the pandemic. Equity helps to align people with the company mission and get them to ‘think like founders’. It encourages colleagues to work together in pursuit of common goals, and helps employees to understand and appreciate how their individual actions drive the whole company forward. The company’s best interests become their personal interests too.  

3. Equity encourages staff to stick around. Employee share schemes are a long-term play, designed to reward people who help to build a company from the ground up by recognising their significant contributions to startup success. A typical vesting period is four years with a 12-month cliff, meaning that employees who want to walk away with a meaningful amount of equity should stick around at least a year or two – by which point they’ll have a clear view of the company mission and growth plans ahead, and understand the pivotal role they can play in making those a reality. Equity is highly motivating: Capdesk data shows 80% of workers would prefer to work for a business that offers an employee equity share scheme while 79% would be more committed to, and work harder for, a company that does.  

With a rock-solid business case for offering equity, any cynical startup founders should reconsider their stance. In today’s tough climate, employee equity is essential to attract and retain mission-driven employees who see the company’s success as their own.