Have you ever heard that about employee-owned companies? I love the concept of employee ownership, and I want to share why. Also, I want to show you a couple of brief videos we made (via Brilliance Mining) about becoming employee-owned.
What Is Employee-Ownership?
I first learned about employee ownership and “ESOPs” (see below) in 2013. It is almost like a well-kept secret. Some people are working to change them – me being one of them.
- The employees either entirely or partly own the company.
- One of the most common vehicles for employee ownership is an ESOP, which is short for “Employee Stock Ownership Plan.”
- In essence, it is a retirement plan. The employees own company stock and get paid out its current value when they retire (usually over a few years).
- Thus, the employees have a stake in making the company as successful as possible and driving up the stock value.
- Well-run employee-owned companies empower their employees by training them to think and act like owners.
- As a result, they often create a higher profit margin over companies in the same industry that are not employee-owned. However, that only happens with the proper training and creating an authentic employee ownership culture.
- Ultimately ESOPs are a retirement plan, but if a company embraces it being employee-owned, its staff feels like they’re contributing to the company’s direction. They give input and influence what happens with the company.
In 2022, around 10,500 employee-owned companies exist in the U.S. Around 6,500 have an ESOP, and about 4,000 use other profit-sharing methods.
Why I Love Employee-Ownership
Being part of a well-run employee-owned company is another way to be an entrepreneur.
Employees are owners, yet, no one is the only owner. Each employee is an owner together with other people. There’s a structure around it.
People have input, and they get to share in the success. They see the connection (a “line-of-sight”) between their daily actions and the bottom line result. Many “regular” employees in traditional companies don’t get that.
Here is a tip: Even if your company is not employee-owned, you can train your team in gaining that “line-of-sight.” Your company will do better, especially if you are open to encouraging and considering the input from your team.
An Opportunity to Learn More – And An Example of Brilliance Mining In Action
I worked with Steve Storkan, Executive Director at the Employee Ownership Expansion Network (EOX), on a Brilliance Mining project. Steve has lived and breathed employee ownership for decades. We produced two videos on two questions:
We isolated these questions as the top two of ten key questions business owners ask themselves when considering converting their business into an employee-owned company.
I encourage you to watch these two brief videos. Our goals for these videos were:
- We designed them to quickly and fairly answer the business owner’s top questions.
- We made sure to give a balanced view, i.e., provide a fair comparison of the pros and cons of selling a company to your employees versus a third-party sale.
- We avoid all unnecessary lingo or buzz words.
- We made it as simple as possible while being accurate.
- We kept it as short as possible while achieving he other objectives.
These videos are available on the national EXO website, the website of the new EOX Texas State Center (TXCEO), and Youtube.
I Invite You To Watch These Videos for Two Reasons
- Learn more about employee ownership – it is an excellent concept and can work out very well in the right circumstances.
- Look at it as an example of Brilliance Mining.
Here are the links again:
I’m Curious
- Are you curious about employee ownership – or perhaps you have some experience with it?
- How do you like the videos?
Dr. Stephie
P.S.: I appreciate you commenting and sharing this with others. Thank you!
