Stock options filter down to junior staff in race for talent

Companies across industries are rolling out the red carpet for middle and junior management employees in a bid to both retain top performers as well as attract new talent.

- Devina Sengupta & Sneha Shah

Long-term incentives, floating stock units and global postings are being liberally handed out at a time when companies cannot afford big hikes and bonuses, industry experts and companies said.

Employee stock ownership plans (Esops), for instance, have conventionally been the preserve of senior management and CXOs. But companies are now using it as a tool to attract junior to mid-level people to ensure they stay around longer.

"In the IT, e-commerce, and product sectors, companies have integrated deep-discounted Esops as a core element of their rewards philosophy," said Jang Bahadur Singh, associate partner of human capital solutions at consulting firm Aon in India. Singh noted that traditionally, sectors such as financial services, FMCG (fast-moving consumer goods), and FMCD (fast-moving consumer durables) have offered equity schemes to top and middle management.

The incentive programmes are now trickling down the hierarchy as the battle for niche talent intensifies. "As these industries begin to recruit talent from technology-focused organizations, they are now expanding their equity offerings to include junior-level employees as well to mirror the reward structures of these technology organizations," Singh said. Going ahead, he expects group incentives and flexible work arrangements, which are routine in tech companies, to permeate other industries, too.