Newsletter Article
March 2024

Ownership Culture Insights: Educational Tools to Build Engagement

It is often said that the ESOP alone does not create engagement or better business results, but that companies need to be intentional about creating practices that build culture and lead to better engagement.

Engagement within your company, in turn, leads to the better business outcomes typically associated with ESOP companies. There is also a strong link between education and engagement in employee-owners. Without general understanding, how can employee-owners be expected to think and act like owners? For employee-owned companies, building a strong foundation of education is critical in unlocking the potential of your employee ownership culture.

That sounds great, but where do you start? Let’s face it—job responsibilities are growing, and time is a commodity. Creating your ESOP education plan for the year can be a daunting task—especially for new ESOPs or if it is something you haven’t done before. Even for companies that have an established program, refreshing and reinvigorating the content and approach is a valuable exercise. Thinking through the topics that should be covered as well as how to communicate and incorporate the learnings are all important considerations.

Curated Content at the Annual Conference

With our mission to help employee ownership thrive, we are committed to providing more solutions-focused content to our members. The Annual Conference, happening in Tampa from April 29–May 1, 2024, is no exception. For anyone looking for ideas on where to start, we have created a new track this year, “Building Your ESOP Education Curriculum.” In this track, attendees will have the opportunity to learn from employee-owned companies, NCEO staff, and other experts in the field. Over the course of the three-day conference, attendees will learn foundational principles and begin drafting plans. These sessions will be jam-packed with concrete ideas and tangible resources to bring back to your company, and attendees will leave feeling empowered and prepared to begin an ESOP education program at their company.

Where to Start

For starters, the NCEO offers many resources to aid communication and education. The monthly Download, for example, is sent out to company members to pass along to employee-owners as a way to build education and engagement. These resources include infographics on ESOP basics, worksheets to determine eligibility, and ownership rights and responsibilities (to name a few).

Pulling in research as a way to demonstrate the value of employee ownership more broadly helps to connect employee-owners to something bigger. It also illustrates how ESOP companies fare better than traditional companies in several areas across multiple demographics, including retirement savings, job security, benefits, and increased company performance. Building this understanding enhances the value proposition of your ESOP and emphasizes how it can positively impact the lives of your employee-owners.

Another key step is to assess the current state of understanding and engagement at your company and use this information to create a meaningful communications plan. Think through what strategies can be used to reach employees at different levels of the company, with different tenures and different career goals. It is also helpful to incorporate company milestones, events, and the business cycle to create a robust plan. During the conference session, attendees will have the opportunity to explore various communication tools, work
from a template, and start to develop a communications plan
in real time.

The next area to consider is how to build buy-in and engagement at your company through your education. What structures and processes can be used to create opportunities for your team to see themselves as employee-owners? This is important because there is often a disconnect with people seeing value in employee ownership and actually feeling like employee-owners, something that we see frequently in our Ownership Culture Survey results. By connecting the dots between actions and impact (both on the individual and on the business), people start to develop more of an ownership mindset.

Topic-Focused Education

What topics should be included in your ESOP education? According to the research conducted by the Ramsey group on the Financial Literacy Crisis in America, a lack of personal finance education not only causes stress, but 88% of adults also feel unprepared to handle money. With this, providing foundational financial and business literacy training, companies can help to bridge the education gap, which, in turn, empowers employee-owners to make better financial decisions both personally and professionally. This can include teaching employee-owners how to read income statements, how budgeting and forecasting work, and how to understand the concept of profitability. This blog post has some thought-provoking ideas on how to communicate ESOP literacy.

Going beyond the financial basics, valuation is another area that is complex and out of reach for many employee-owners. Not educating employee-owners on the basics of valuation can be a missed opportunity, especially in terms of motivating employee-owners to make decisions that positively impact the bottom line and company value. Using relatable examples to teach complex subjects can help to break through the barriers to understanding.

Bringing It All Together

The goal of all this education is to create more engagement, increase how often people are thinking and acting like
owners, and make employee ownership meaningful in the here and now.

For companies looking to establish and/or improve their education programs, there are tools and resources readily available on the NCEO website. For those who are able to attend our Annual Conference and join the Building an ESOP Education Curriculum track, you’ll leave with a concrete plan and material to get you well on your way.