How De Dorpsgarage keeps top talent with virtual shares
A customer case study on employee participation for service advisors and technicians
A local garage with the scale of a growing automotive business
De Dorpsgarage is a Dutch automotive company with six locations across the Netherlands. Founded by Ruben Elshof, the company provides maintenance, repairs, MOT testing and other automotive services for a wide range of car brands. It combines the personal character of a local garage with the scale and professional organisation of a growing automotive business.
Founded
2009 by Ruben Elshof
Locations
6 across the Netherlands
Award
BOVAG Independent Car Company of the Year 2022
Services
Maintenance, repairs, MOT testing and more
Good people are hard to find, and even harder to keep
Like many businesses in the automotive industry, De Dorpsgarage found it difficult to attract strong service advisors and technicians, and to keep them once they were on board. A catchy vacancy text or a welcome bonus of a few thousand euros does not solve that. Those are short-term fixes, not sustainable answers.
Ruben Elshof's conviction: if you want a lasting connection with your people, especially the new generation, you make them a stakeholder in the company.
Ten percent of the holding, converted into virtual shares
As one of the first companies in the automotive industry, De Dorpsgarage issued virtual shares through Sharesquare, without involving a notary. Ten percent of the regular shares in the holding were converted into ten thousand virtual shares, distributed among the service advisors.
The payout is fixed for a five-year horizon, on the condition that participants stay with the company. Anyone who leaves earlier is free to go, but the payout lapses. Participants get no voting rights in the shareholders' meeting, so control stays exactly where it was.
Sharing is the new having
- The owners share the increase in value with a group of employees.
- This is a conditional, additional remuneration to the salary.
- There is a long-term focus and a future cash out event.
Virtual shares in practice
- The employees receive Virtual Stock Units (VSUs).
- VSUs are a unit of account, linked to shares of the company.
- Based on VSUs, the individual right to payment at a future event is determined.
Why it's a win-win
- No purchase required: no investment risk for the employee.
- Tracks stock price: employees are rewarded as owners.
- The payment runs in tandem with business performance: no maximum.
From grant to payout in five years
Grant
Service advisors receive virtual shares in the holding. Some hold up to a few percent of the company.
Every year
The valuation of the virtual shares is updated, so participants can see on their dashboard which reward is building up.
Year 5
Participants who are still with the company receive the agreed payout. Leaving earlier means the payout lapses.
After year 5
Participants choose: cash out the appreciation, or hold the virtual shares and grow with the company value.
Retention without the raise cycle
The big win for De Dorpsgarage: no more salary raises every so often just to keep people on board. The team is motivated to drive revenue, because when the company does well, the virtual shares become worth more. After the five-year term, participants can cash out the appreciation or hold their shares and grow with the company.
The service advisors are on the plan today. The technicians are next: they currently have a bonus scheme, which De Dorpsgarage wants to replace with virtual shares as well.
Read Ruben's original column in Aftersales Magazine"It is my conviction that you need to make employees part of your business if you want to build a lasting connection with your people."
The De Dorpsgarage core team celebrating the launch of their virtual share plan.
Go deeper
The full explainer on virtual shares, VSOPs and why growth companies use them.
Virtual shares: how they work and when to use them
The full explainer on virtual shares, VSOPs and why growth companies use them.
How SARs work and how they let participants benefit from growth without real shares.
Stock Appreciation Rights (SARs): reward value growth
How SARs work and how they let participants benefit from growth without real shares.
Related reading
Two next reads on the same topic.
5 rules of thumb to strengthen your culture with employee participation
Employee participation is a sharp tool: it can move you forward fast, but you can also cut yourself on it. Five lessons from practice.
How many shares should you grant employees?
How big to make the pool and how much one employee gets: work backwards from the company you want to be, and keep room for later grants.