In an age where working from home is the norm, benefits and perks are ever-growing, and competition for hiring top-tier talent is at an all-time high, what sets one company apart from the next? Happiness plays a huge role in not only hiring but retaining current employees. It’s happiness that makes employees an impressive 12% more productive workers compared to those that were unhappy with their jobs. And what can a company do to make their employees so happy that 80% recommend their organization as a place to work? Become a certified Employee Stock Ownership Plan (ESOP).
What is an ESOP?
Essentially, ESOPs give shares of the company to their employees based on tenure, which equates to a total vestment amount. So, as the company thrives, the employees directly benefit from the overall success too.
In 1965, Louis O. Kelso created the ESOP philosophy as a possible ownership structure. It was then passed through the Employee Retirement Income Security Act in 1974. Today, The Department of Labor’s Employee Benefits Security Administration oversees ESOPs.
ESOPs were created to encourage private company owners to transfer ownership to employees at no cost. Today, over 6,500 American companies are proud ESOPs, making over 10.5 million people employee-owners nationwide.
Working for an ESOP has been linked to greater wealth. According to a study by the National Center for Employee Ownership, employee-owners have a 92% higher median household wealth and 33% higher income from wages than those who are not employee-owners.
Also, with the heightened focus in recent years to have strong corporate social responsibility goals, ESOPs are one way to execute on them. ESOPs empower employees to think and act like owners. If a company is organized in this non-traditional ownership structure, they are better proportionate to spread the success with all that are devoted to making it happen every day, creating workplace equity and inclusion.
Increased Productivity & Employee Engagement
Studies suggest that ESOPs have a 12% higher productivity level than traditionally held companies. As an employee, having higher productivity leads to deeper relationships, creating true client intimacy, a greater sense of purpose, the ability to try more things and grow, and ultimately, increase the overall success of the company.
ESOP’s show their resilience during more challenging times, such as a recession or pandemic. In fact, employee-owned companies are 4X more likely to retain staff than other types of businesses in those trying times. During the 2008 crisis, ESOP companies were actually 25% more likely to stay in business—and continue to evolve and grow year-over-year, despite it all. Proving stability in times of uncertainty leaves an immeasurable impact on employees, clients, and community partners.
Decreased Turnover Rates
ESOPs have been proven to decrease employee turnover rates, which supports the claim of overall happier employees. Employee-owners have an average of 53% longer job tenure than workers who are not part of an ESOP.
The benefits of an ESOP go far beyond a job title or salary number; job security, increased productivity, greater wealth, being a part of a team that is highly engaged and accountable to one another, and overall happiness are all proven benefits of joining an ESOP. Butler/Till became an ESOP more than 10 years ago, in 2011, and is incredibly proud to be composed of 250+ employee-owners and stand as a true testament to the success of this ownership structure.
Ready to join us? Unlock your highest potential and become an employee-owner today! Apply today.