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Employee Engagement on the Road to IPO

This topic was initially slated as a session at Synergy 2020 in Austin, TX – our plans changed, but the quality of our content didn’t, and we want to share it with the public as an evergreen resource. Learn more about Synergy here.

Many companies make the journey to becoming a public company. There are of course numerous steps in this process, but one of the key facets of going public involves effectively communicating the upcoming changes to employees. There are a lot of ways you as a plan administrator can help your company’s employees thrive throughout the transition to a public company, and all of the new opportunity and responsibility that comes with it. This article discusses certain key areas to consider as you think about what the process entails.

What can make the journey challenging is that every company has its own culture and a unique perspective on engaging their employees with respect to an initial public offering (IPO), and what will be most effective for them as they go through the IPO process. This perspective is based on a number of different factors, including: the time of IPO, the landscape of the industry and current market conditions, and general employee demographics, just to name a few. And, while no two journeys are the same, one thing is certain: subject to the laws and regulations relating to IPOs, effective and timely engagement of your employees is crucial.

Keep in mind that there are legal considerations relating to employee engagement and communication prior to an IPO.  Please consult with your legal counsel on these and other important considerations.

Effective Employee Communications

Many of you know the basics of employee communications (e.g., defining your audience and your messaging, and ensuring that the timing is right).  However, there are a number of other things you can think about to maximize the impact of your communication work as you prepare for an IPO. 

To streamline your employee communications workflow in advance of an IPO, here are a few actionable tips to help administrators clear the communication airwaves and design their outreach in a way that’s meaningful for employees. When it’s done right, it can help communicate the value of your company’s equity awards in an extraordinary way.

  • Tip #1: Keep Your Emails (and Their Subject Lines) Concise – You never get a second chance to make a first impression, and this is critical with your email communication to your employees. The rule of thumb here with any of your emails is to keep the subject lines straightforward and to the point. And, let’s face it, when it comes to tricky topics like equity and finance – less is definitely more. Here are a few examples of subject lines that quickly and clearly convey the contents of the email.
  • Your Equity As a Public Company Employee  – What You Need to Know
  • Learning About the Lock-Up Period – Five Facts to Help Your Prepare
  • Our New Employee Stock Purchase Plan – Learn More Here

Additionally, while emojis are great for emails to friends and family, they are not good for employee communication (depending on the culture of your organization – one or two may work if deployed in a meaningful way).

  • Tip #2: Get Feedback From Your Employees – The IPO journey can be confusing for many employees, so getting information directly from them can be a helpful way to guide your messaging into specific areas that are most beneficial. Ask your employees what they want to know more about, when is the best time for them to get the information, and what format they prefer. It will not only save you time and resources, but it can help your work be more useful to your target audience – your employees.
  • Tip #3: Use an Email Alias or Group Mailbox – Let’s face it, sometimes it’s easy to hesitate to ask a question when you know who will be answering it! Setting up an email alias or group mailbox for employee questions and comments can help to have a general and unintimidating method for employees to ask questions.  People may feel more comfortable sending in questions when it’s a team email alias rather than a one-on-one exchange. Additionally, it can help you and your team with coverage issues – preventing a backlog if someone is out of the office on vacation.  You can also set up an automated out-of-office message for the group mailbox, directing anyone who sends an email to other resources, or giving them information on your standard turn-around times for a response.
  • Tip #4: Hosting Virtual or Live Office Hours – It’s like staying after school for extra help! Set up office hours for yourself (as an administrator) or financial advisors where appropriate to hold one-on-one sessions with employees to share information with them in a more familiar setting.  As your provider, Shareworks by Morgan Stanley can offer great assistance here from an educational perspective, so reach out to your Relationship Manager today to learn more.  You can also chat with the Morgan Stanley Financial Wellness team during their office hours as part of the Synergy 2020 Virtual Series on Monday, June 15th from 2-4 pm ET – they’ve worked with pre-IPO companies in the past to help get their employees ready for any potential changes in wealth coming from the IPO.  You can also drop-in to other office hour sessions during the 2-week Synergy 2020 Virtual Series.  
  • Tip #5: Provide Digital Materials to Define the Basics – There are a lot of new terms that become relevant in the IPO process, and you want to ensure that you have enough material available to define them.  There are many facets of your equity plan that will be impacted by an IPO, and you want to create a resource library to which you can refer your employees for self-directed learning to supplement other opportunities you provide them. For resource examples, you can check out a few of our Synergy 2020 Virtual Series sessions (including the June 17 session titled “Your Digital Communication Toolkit”, or the afternoon session on that same day titled “Tips for Building an Effective Equity Training Deck!”).  You can also check out some of the resources in the Shareworks Discovery Lab to learn more about effective ways to engage your employees.
  • Tip #6: Run a Training Session on Insider Trading – The insider trading piece of the IPO puzzle is perhaps the most important for your employees, because the possible consequences are severe. In-person training sessions are perhaps the best way of sharing this information, allowing for people to take in specific information and ask their questions in other sessions (e.g., office hours or via email).   Your in-house legal team and outside counsel will likely be involved in or drive preparation of materials for the session.  Consider leveraging your technology provider to help streamline this process (for example, using the Shareworks Insider Management functionality to support your new insider population).

The list above is just a starting point, but it represents common denominators for most companies that are preparing to undergo the IPO process. Think through your employee base and your company culture, and use that information to better tailor your development of materials in the areas above.

Increased understanding of the IPO process can have a number of benefits, including increased employee engagement and understanding of the new requirements of life as a public company employee. It also saves time for you and your team, as your employees understand their new status and have the resources you’ve provided as a plan administrator to address any questions that come up.

To learn more about the products and services offered by Shareworks by Morgan Stanley, get in touch today.

Information made available by Shareworks by Morgan Stanley is for informational purposes only and does not constitute legal or tax advice. You should always consult with and rely on your own legal and/or tax advisor(s) as Shareworks does not provide legal or tax advice and the information is not tailored to the specific situations of your company or your employees. The information may not be current and is subject to change without notice. Shareworks makes no representations or warranties concerning the completeness or timeliness of the information for your purposes. Shareworks by Morgan Stanley services for public companies are provided by Solium Financial Services LLC and Morgan Stanley Smith Barney LLC, members SIPC, and their affiliates, all wholly-owned subsidiaries of Morgan Stanley. Shareworks by Morgan Stanley fund transfer services for private companies are provided by Solium Financial Services LLC.

CRC 3083726 (05/2020)