We here at The Menke Group have previously argued that the COVID-19 pandemic is an opportunity for change, for creating a more equitable economy, a better capitalism. We have said that the future of the American economy will hinge on employee ownership, and on ESOPs in particular. We have written about the ways ESOP companies have felt buoyed by their employee ownership cultures, and about the bills put forward in both houses of Congress that would promote employee ownership.
Now, the data shows that not just companies and politicians, but the American consumers themselves want companies that protect the lives and livelihoods of their workers, that live up to their stated values of putting people first, and that enact utilize creative solutions to avoid layoffs and support employees in difficult times.
In short, consumers want to do business with companies that embody the values at the core of every ESOP.
The independent nonprofit JUST Capital, which tracks, analyzes, and engages with large corporations and their investors on how they perform on the public’s priorities, polled over 1,000 consumers during the first few months of the pandemic. Their survey results show that, overwhelmingly, Americans want to give their business to—and work for—companies that put their employees first.
When asked what companies should prioritize during COVID-19:
- 89% said providing workers with adequate personal protective equipment (PPE).
- 87% said ensuring safe workplaces and social distancing.
- 82% said giving employees the flexibility to work from home whenever possible.
- 73% said companies should protecting workers’ jobs, even if it means corporate profits.
JUST Capital analyzed America’s 300 largest public employers to examine how the responses of the country’s biggest companies have lined up with what consumers actually want. The results were mixed, to say the least.
For instance, 77% of survey respondents said companies should prioritize providing hazard or additional pay for employees working essential jobs, but only 12% of the companies analyzed actually provided any such pay increases, and a number of them had already let those increases expire by June, when the survey results were published.
The survey also found that transparency is critical in challenging times, and that listening to and empowering workers is essential, but few companies live up to those principles. For instance, 77% of respondents said they would take a pay cut or reduced hours if it meant a coworker would be able to keep their job, and yet only 28% reported actually being asked about cost-cutting measures. Perhaps unsurprisingly, 70% also said that CEO pay cuts would be a welcome and effective tool for avoiding layoffs, as well.
The survey also showed that consumers are eager for a better way.
- 85% said that “the pandemic has exposed underlying structural problems in American society.”
- 80% agreed with the statement that “the pandemic has opened my eyes to acceptable and unacceptable corporate behavior.”
- Nine out of 10 respondents agreed that the COVID-19 crisis represents an opportunity for a “reset” on the way America does business, with a far greater focus on doing right by their employees, customers, and communities.
The survey results strongly indicate that consumers are watching businesses carefully to see which ones live up to those ideals and which ones do not. 70% said they would stop buying from, investing in, or applying to companies that rolled back their worker-first policies as they reopened from the pandemic. 75% said they would go out of their way to support companies that showed their commitment to their workers was more than a temporary measure.
The survey never specifically asked about ESOPs, or any sort of broad-based employee ownership. Even so, the picture that the data paints of this “reset” could not be clearer:
As they look to the future, Americans want to buy from, and work for, companies that enact worker-first policies and stand firmly behind them. They want companies that will go to any length to avoid layoffs and, if layoffs become unavoidable, support the terminated employees in meaningful ways for as long as possible. They want companies that will be transparent about the challenges they’re facing and that seek input from their employees about finding solutions. They want companies that treat people fairly, empower their workers, and lift up their communities.
Americans want ESOPs.
ESOP companies out-perform their traditionally-owned competitors during recessions and times of crisis (and recover faster, and in a better position to capitalize on their competitive advantage) precisely because ESOP companies embody the above practices. Maintaining transparency, giving every employee a voice, and putting workers first are core components of ESOPs. And because ESOP companies put such a high premium on protecting jobs, workers cut their chances of being laid off in half during a recession—and six times under more stable conditions—just by working for one.
The time has come for a better, fairer, more equitable American economy, and ESOPs will be right at its heart. Washington wants it, businesses want it, and, as JUST Capital found, the American people want it, too.
Your business can be a leader in the new, better version of capitalism. Take your first step today. Contact The Menke Group to schedule your free preliminary analysis.
Menke & Associates, Inc. has helped over 3,500 companies successfully transition to employee ownership. Our holistic ESOP approach enables a positive outcome for the company, its employees and its shareholders. We believe ownership is powerful.
