The UK’s SMEs are being urged to adopt employee profit share schemes to encourage staff loyalty.Mace & Jones, a law firm specialising in employment legislation, has recommended that small businesses would improve the retention of the staff if they introduced a scheme similar to the one Tesco offered its staff.The supermarket has recently announced that many of its staff stand to benefit financially from the company’s Save As You Earn share scheme. Employees who joined the scheme five years ago can buy shares in the supermarket at the £1.98 price which was set on joining. Tesco shares are currently valued at 429.5p, meaning that 50,000 staff will receive £150 million.Now, Mace & Jones says that similar schemes could be highly effective for SMEs as they seek to both recruit and retain staff."The idea behind it and other share schemes is to motivate staff by giving them a sense of ownership and a keen interest in how the business performs," said Bruce Robinson, a cooperate lawyer at the firm."Share schemes are proving an increasingly popular way of running a business and can provide attractive tax incentives for both the employee and the employer," he added.A recent report by recruitment consultancy Robert Walters found that the shortage of qualified staff in some sectors meant that SMEs had to offer extremely high salaries to new employees to secure their services.© Adfero Ltd

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