Pune-based Persistent Systems, one of India’s niche software and services companies, said it has decided to overhaul its employee stock options plan to make it “one of the most inclusive” in the global IT services industry.
The new plan, it said, will cover around 80% of its global employee base.
The company, which focuses on auto software, did not give details of the plan, such as whether it would be optional or whether all employees are automatically given shares along with their salaries.
It said the plan will cost around 0.7 to 0.8 percentage points, presumably of its revenue.
This expense, it said, would be ‘offset over time’ due to increased productivity from the employees.
The move comes in the wake of tough competition in the IT space for talented workers.
IT, along with telecom, has been one of the two sectors that saw a strong uptick in demand due to the COVID-19 pandemic, as people rushed to work from home.
The sudden increase in demand for manufactured goods, after the lifting of COVID-19 lockdowns, has also led to a surge in demand for industrial IT solutions from the corporate sector — leading to a hiring spree in the IT sector.
Employee stock options, which typically requires the worker to stay with the company for a certain period of time to get the stocks credited to his or her name, are seen as effective ways to retain talent and keep it motivated.
The new scheme applies to both Indian and non-Indian employees and is designed to reward the employees for the resilience they have shown during the last two years, the company said.
The company said the new ESOP will give workers an opportunity to participate in the value created for the shareholders as co-owners and demonstrates the company’s commitment to inclusivity and shared access to long-term financial benefits.