We could all be facing significant share plan changes if the UK Government acts on the recommendations of a recent commissioned review by the Office of Tax Simplification (OTS) – so now is the time to start planning.
This review explores potential revenue streams in response to national debt soaring. The OTS issued the first of two reports in November 2020, focused on the reform of capital gains tax (CGT).
The potential impact? Growth shares are clearly in the spotlight, but tax-approved all-employee share plans have not escaped either – the Save As You Earn (SAYE), also known as Sharesave, as well as the Share Incentive Plan (SIP), could both risk having their tax reliefs removed or reduced.
This is being challenged by several industry bodies participating in the consultations, including ProShare, and the impact on SAYE and SIP is looking positive at this stage. However, it’s still in everyone’s best interests to start thinking and planning ahead, particularly around providing clear, concise and jargon-free communications to colleagues.
Communicating through change
Whether it’s an organisational restructure or understanding the implications of tax changes, we should all be mindful of the different emotions we experience during the ‘change curve’.
For those not familiar with the change curve, it’s a model tracking our five emotional states during change – similar to when we grieve: shock, denial, anger, depression and acceptance. Not everyone agrees with each stage, but it’s still useful to consider the mixed emotions individuals experience.
A change to CGT would really shake engagement levels as tax efficiencies are a clear incentive for people to join share plans. People would undoubtedly start reevaluating if plans were right for them – and without clear information presented in a digestible way, we risk losing participants or see them make ill-informed decisions.
So, to make sure colleagues don’t become overwhelmed with tax changes if they’re announced following the second report, here are five ways you can minimise the confusion and stress for those coming to terms with change:
1. Little and often
When we receive unexpected news, there’s often an initial shock followed by a period of defiance. It’s common to reject the idea change will impact us, so it’s best to deliver clear and frequent bite size chunks of information whilst people come to terms with things, without creating information overload. Face-to-face communications are vital and it’s helpful to continually promote where individuals can access additional information for after any shock wears off.
2. Make the changes visual
People need varying degrees of support to get through confusing situations, and turning complex information into easy to understand visuals helps a huge proportion of us. Be empathetic to the language most people will understand, extract the key bits of information and present it with clear graphics to emphasise the points you want to convey. For instance, an infographic explaining a ‘before and after’ view can really bring scenarios to life.
3. Don’t forget the positives
Yes, we have to communicate tough changes, but we shouldn’t lose sight of any remaining benefits. When people visualise their future, we’re doing a disservice by only focussing on the drawbacks, as they’ll miss out on the opportunities and benefits still available. Transparency is key, and that means painting a full picture, including the good, the bad and the ugly.
4. Conversation is king
It’s impossible to know what each individual needs as we’re all different – so provide everyone with opportunities to tell you. The Covid pandemic has supercharged the use of digital communication tools like Microsoft Teams, Slack, Zoom and Google Meets, so use them to open up dialogue, encouraging group chats and online Q&As. Regular opportunities to talk means people have time to digest what the changes mean for them, so don’t close the channels at the first sign of defiance. Be empathetic and continue to have conversations.
5. Harness the power of storytelling
Sending out generic emails with your take on any changes won’t work. As humans, we’re programmed to fear change and avoid danger – so at the first hint of trouble, many people will close down and walk away; this could mean walking away from share plans. So, if you want people to ‘get it’, the power of storytelling is here to help. We’re told fairytales and fables as children for a reason – they’re the velcro that stick messages to the brain. That’s why turning confusing legislative changes into real-life stories – whether that’s verbally, in a video or an infographic – can help people relate to the change and make it stick.
Are CGT changes going to affect our share plans? Only time will tell. But instead of reacting once a decision is made, now is the time to start giving thought to how your specific share plans could be affected and how your people will handle the change.
It’s worth remembering too, although we may have understood and come to terms with any form of change – tax or otherwise – most people will not have. We’re all scattered throughout the change curve stages, which is why we must constantly circle back with colleagues and decide what support they need.
If you’re helping people come to terms with change, the challenge is not just giving them information, it’s considering what emotions your messages are triggering and what approach you should take to help navigate people through their personal journey.
With the right combination of planning, clarity, empathy and understanding, you’ll be in a better position to successfully move people from resistance to acceptance, ensuring they still get the most out of the share plans on offer, no matter what the future holds.
We hope this has helped you think about the importance of communicating change in your business. If you’d like to carry on the conversation and discover how Eximia can help employees be engaged and ready for any changes to share plan features today and into 2021 – please get in touch.