Brewdog: Free Shares & Profit Sharing. The devil is in the detail
Brewdog has announced plans for free shares and profit sharing for employees. Brewdog have now published details:
https://www.brewdog.com/uk/brewdog-blueprint
They have also announced they are re-branding their bars as 50/50 to reflect their employee profit sharing scheme.
In essence 750 salaried employees (Brewdog employs a bit over 2,200) will receive shares which Brewdog say might be worth £30K a year over 4 years. It’s not certain. The shares will initially be held in trust (common in such schemes) and can be sold when Brewdog launches an IPO or is sold for whatever value they then have. As often in such schemes anyone leaving before this happens will lose the shares. Hence it is a staff retention issue.
The remaining employees will share profits from the bars they work in. Brewdog says this could amount to £3-5K a year. Such schemes depend a lot on the criteria which determine how they pay out- for example, how is the profit worked out. Brewdog have shared a worked example in their blueprint. Without knowing how much staff are actually paid (based on hours worked)- Brewdog pays the living wage-it’s hard to judge what this will mean in cash terms
Brewdog describe these moves as ‘innovative’. I’m not an expert in the hospitality sector-aside from drinking and eating in it obviously- so that may be right, although Wetherspoons has had an employee share scheme since 1998. They are quite common in the private sector however often (but not always) offered to promote staff loyalty in preference to recognising a union.
The blueprint implies that in 2022 so far staff turnover is running at (very roughly) 25%. I have nothing to compare that against, although in the area where I work as a union officer it would be considered very high even currently. A certain level of staff turnover is normal and balances new skills against experience. However there is cost. Each new staffer needs training and will take a while to be fully effective.
It may be that all this will help staff retention certainly, although experience suggests that for many the core issues of decent wages and conditions matter a lot more than share handouts and profit sharing which are always uncertain things.
Pensions should be but usually aren’t a core issue for younger workers but the blueprint notes Brewdog will pay up to a 10% contribution to a DC pension. That’s a decent amount except it doesn’t say how much an employee needs to contribute to attract that. Where unions are recognised these things are subject to detailed negotiations not least because the cost is significant.
My private sector employer offers free shares on an annual basis and a yearly bonus but trade unions are also recognised. It’s understood that while the shares and bonus have their place feeling content at work with an employer that behaves reasonably is more important to many.
The blueprint refers to a weekly meeting to look at equality and diversity. One hopes that notes of the meetings and in particular what actions are taking place are sent to all employees. It doesn’t say. It also reveals that the staff representative forum has got Brewdog to make some staff welfare changes. Good and not so unusual for such forums. What it doesn’t do of course is to negotiate wages or indeed any of the above. Brewdog really need to say why it doesn’t. Announcements like the blueprint are one thing but it doesn’t suggest an employer/employee partnership, even if it implies it.
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