Employees are leaving their jobs at record rates. The Bureau of Labor Statistics reported that nearly 9 million Americans quit their jobs during the last two months of 2021 alone. Who among us has not had the experience recently of seeing a favorite local business with a sign in the window saying, “Sorry, we are short staffed?”
At a time when the pandemic is still reshaping the American economic landscape, many workers have a plethora of opportunities available to them, and workers are more prepared than ever before to leave one job for another that fits with their personal values, it is clear that employers must be willing to use every tool at their disposal to attract and retain employees.
A recent study conducted by the National Center for Employee Ownership (NCEO) on behalf of Employee-Owned S Corporations of America (ESCA) found that, going into the COVID-19 pandemic, workers at ESOP companies had more than twice the retirement savings of employees at traditionally-owned firms who had 401(k) accounts alone: $132,000 compared to $64,000 on average.
A recent NBC News report took a look at some of those workers who chose to stay at their jobs, even when they were unglamorous or put them on the frontlines of the pandemic, and the common thread was this: all of their companies had ESOPs.
NBC shared the story of Felimon Chairez, a 53 year old Mexican immigrant who is has been employed as field worker at McKay Nurseries in Waterloo, WI since 1990. He has $660,000 in his retirement account. He says he intends to retire comfortably in just a few years. The value of McKay’s employee-owners’ shares increased 30 percent in 2021. The company has had multiple nursery workers who retired as millionaires.
They spoke with Denise Pouncy, a cashier at Johnny’s Pizza House in Shreveport, LA, where she has worked for 23 years. Johnny’s has been ESOP-owned since 2000, and has had several employee-owners retire with millions in their accounts. “Johnny’s is the best company to work for,” Pouncy said. “When I get ready to retire, I know I’m going to be comfortable.”
“There’s a loyalty factor that’s hard to put a dollar amount on,” said Johnny’s Pizza House president Melvin DeLacerda. “The one thing I’ve noticed? In our area recently we’ve seen a lot of restaurants that had to shut down or limit hours because of staffing problems. We have not had to shut down yet.”
A recent study conducted by the National Center for Employee Ownership (NCEO) on behalf of Employee-Owned S Corporations of America (ESCA) found that, going into the COVID-19 pandemic, workers at ESOP companies had more than twice the retirement savings of employees at traditionally-owned firms who had 401(k) accounts alone: $132,000 compared to $64,000 on average.
Companies with ESOPs also tend to provide higher wages, better job security, and benefits to improve their employees’ quality of life and career aspirations, such as childcare and tuition reimbursement. Is it any wonder that the ESCA study found that ESOP companies added employees during the pandemic, instead of losing them?
ESOP companies protected their workers’ jobs at a rate four times higher than traditionally-owned companies in 2020. They were less likely to cut hours or pay. They were quicker to implement safety measures and those measures were more extensive. In short, companies with ESOPs put their workers first.
An ESOP can be the backbone of a business owner’s succession plan, or it can be a way to reward employees and keep them engaged and motivated. Either way, it gives employees a seat at the table and a genuine financial stake in the success they work so hard to create. Employee ownership creates a more satisfying work experience that promotes longevity.
If you want to combat the tide of the Great Resignation, you need to make your business a place people want to work, and want to stay. There’s no better first step than turning your employees into owners.
Contact Menke & Associates today for a free preliminary analysis to find out if an ESOP is the right fit for your business.
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.
