I have spent the better part of the last 15 years helping companies by providing temporary staffing around their stock plan administration. As a married man, I no longer get to use that as killer pick-up line, but it has allowed me to spot an interesting trend as of late, just when I thought I had this world pegged.
Almost without exception, the reason a client wanted a temporary stock plan administrator fit neatly into one of two areas:
- Vacancy – sudden departure, medical leave, vacation
- Major Event – acquisition, IPO, option exchange, new plan roll-out
Over the last several years, however, the need for short-term stock plan professionals has dropped noticeably, especially around vacancies. Stock plan departments are better organized, stock plan systems are far more robust, and companies increasingly favor restricted stock/restricted stock units (about which it would be said that activity is more predictable). Before these developments, there used to be panicked calls and insistence that “someone needs to here TOMORROW” when the two-week notice came from the existing manager, but those days are gone. While many companies still like to bring in temporary expertise, more and more companies are able to weather the storm through a combination of good intentions (many stock plan professionals do time their departures to coincide with less busy times, so as not leave their co-workers in a lurch), cross-training of junior resources, and a short-term bump in workload for the remaining team members until they are able to hire. Smaller companies are also taking this as an opportunity to reevaluate the need for inhouse expertise and will often see the outsourcing light at this point.
This has been going on for around 5 years, and nothing to see here really. Against this background, though, we are starting to see another major shift – the one that has surprised us – towards using adjunct temporary staff. This is really a shift toward replacing the “temporary” with a more fluid, ongoing arrangement, focused usually on functional tasks (keeping up with employee communications is a very popular one), with the resource essentially becoming a fractional full-time equivalent. Just in the last 2 months, I have talked with companies looking to fill this type of work bucket with basic equity accounting, Section 16 filings, special project assistance (database clean-up is popular), ESPP administration, and employee communications/education assistance. These clients are just as creative in how they envision the schedule, and are more willing to accommodate remote as well as irregular coverage.
The idea is not new – this is something we were always suggesting in response to client’s complaints regarding wild fluctuations in workload, for example. What I think has changed is that, in the past, eventually a case could be made for bringing on a second full-time administrator. Workloads were also more unpredictable, so these types of arrangements were less practical in the real world.
This is a win-win for both the stock plan consultant, especially the seasoned one, who wants both variety and flexibility, as well as our clients who now have a viable alternative to increasing headcount, while being able to adjust more easily and quickly to workload fluctuations.