How Outset Medical Reinforced Inclusivity, Retention, and Attraction Using Cashless ESPP

Problem

Companies today face increasing challenges in employee engagement, financial security, and workforce retention. For Outset Medical, a rapidly growing healthcare innovator, these challenges highlighted a critical issue with their Employee Stock Purchase Plan (ESPP). The existing plan disproportionately benefited highly compensated or commissioned employees, limiting meaningful participation for a significant portion of the broader workforce. Many employees found themselves unable to afford the payroll deductions required to fully participate, resulting in missed opportunities for financial growth and equity ownership.

Outset Medical recognized that to remain competitive and effectively attract and retain top talent, their ESPP needed to evolve into a benefit that could be equally advantageous for all employees, regardless of their compensation levels.

Solution

Outset Medical partnered with Carver Edison to introduce Cashless Participation, an innovative approach designed to democratize access to ESPPs. By eliminating the financial barriers associated with payroll deductions, Cashless Participation empowered all employees to significantly enhance their buying power and stock ownership opportunities.

Recognizing that successful implementation required robust employee education and clear communication, Outset Medical collaborated closely with Carver Edison to develop a comprehensive employee education strategy. They created a customized online portal equipped with interactive tools, webinars, and extensive informational resources. Additionally, targeted communications were tailored to help employees fully understand and confidently participate in the improved ESPP.

These proactive measures simplified the enrollment process, boosted financial literacy, and greatly increased overall employee satisfaction and engagement with the benefit.

Results

The adoption of Cashless Participation had immediate and substantial positive impacts. Outset Medical saw total plan participation increase by 40%, reaching an impressive 90% enrollment among eligible employees. Furthermore, 60% of enrolled employees opted for Cashless Participation, significantly surpassing traditional methods in financial returns.

Employees utilizing Cashless Participation achieved an impressive average return on investment (ROI) of 272%, compared to just 52% for traditional participants. Top performers who used Cashless Participation even experienced average returns as high as 607%. Additionally, participants earned an average of $7,800 more in equity than they could have without Cashless Participation, greatly enhancing their long-term financial security.

This transformative approach to the ESPP not only improved employee financial wellness but also positioned Outset Medical as a progressive, employee-centric employer dedicated to fostering a culture of inclusion and financial empowerment.

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At the time of Open Enrollment, we had 50% of eligible employees enrolled in the ESPP. By the end of Open Enrollment after adding Cashless Participation, 90% of eligible employees had enrolled in the Plan and 60%of the eligible participants had elected to use Cashless Participation."

–Lori Serrano, Outset Medical Director of Equity Programs

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