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.
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:
- Are you curious about employee ownership – or perhaps you have some experience with it?
- How do you like the videos?
P.S.: I appreciate you commenting and sharing this Brilliance Nugget with others. Thank you!