Staff stock option key to retaining tech talent
By Janet Munguti
| September 5th 2021
Kenya’s emerging technology space has grown exponentially but its best kept secret is the struggle to find, motivate and retain top tech talent. This is in addition to the fact that the sector has attracted a slew of global tech behemoths and created a competitive ecosystem that has enabled indigenous firms to build and train tech talent locally.
Now, this locally trained talent has become a point of contention between indigenous companies and the world’s tech crème de la crème that have invested in Africa – Microsoft, Google, Huawei, IBM, Intel Corporation et al.
As human relations leaders, we face a different landscape: a hybrid workforce, virtual recruitment and a greater emphasis on diversity and inclusion. This has fueled an already difficult situation in local tech start-ups: motivating and retaining skilled talent.
While high salaries and benefits have traditionally been used to attract and retain talent, this is not always a viable option, particularly when startups face poachers from more established competitors.
In Kenya, an indigenous tech logistics start-up like Sendy Ltd, whose supply, freight and transportation operations are led by artificial intelligence, takes pride in investing in local tech talent, rigorously training and molding their own engineers in an in-house engineering hub. However, it must contend with loss of this talent to larger global competitors.
However, global companies have used a tried-and-true tool to attract and retain workers: the employee stock option plan, or ESOP, a scheme in which a company grants employee stock options. An employee is given an option that grants them the right to purchase a specified number of shares at a predetermined price at a future date at no additional cost.
The stock option way was born in 1957, when a group of engineers founded Fairchild Semi-conductors, the pioneer chip startup in the world - famous California technopole.
While this radical idea has gone through several iterations in mature markets, the trend is gaining traction in Africa. Sendy Ltd, which is expanding into East, West, and North Africa, has followed suit with a stock option system for its staff.
All staff are eligible to receive an option (an offer) to own a part of the company through stock options. Employees do not get to own their stock options all at once, but the stock trickles out over one to four years, as one “vests” a part of the option grant each month.
Chief HR Officer at Sendy Ltd.
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