February 17, 2021

Employee-Owned Companies Rated Higher on Glassdoor

NCEO founder and senior staff member

An NCEO analysis of Glassdoor ratings of companies on the Employee Ownership 100 list shows that they tend to be more highly rated by employees than their competitors. The study looked at the three main Glassdoor ratings:

  • Would You Recommend this Company to a Friend
  • Overall Rating
  • Benefits Rating 

We included only companies that had at least 50 overall employee ratings and at least 10 benefit ratings. The benefit reviews are likely less reliable than the other ratings because of the smaller number. The companies were compared to their largest five competitors. Most companies had between 100 and 300 overall reviews, a similar percentage of their employees as with their comparison companies. We looked at both the ESOP company scores compared to the average scores for the five competitors on each of the three measures as well as where the company ranked. Rankings could be from 1 to 6; ties were ranked as the midpoint between the two (or, rarely, three) scores. Sixty-four of the Employee Ownership 100 companies had enough ratings to be included.

The results need to be viewed with caution. Even the companies with the highest percentage of employee ratings had only about 5% of their total workforce responding; 10% would be an unusually high number. The ratings of any particular company, therefore, may not be indicative of what employees think about the company. Viewed over the 64 companies and their comparison companies, however, some of these random variations become less important. 

Keeping these caveats in mind, the overall data indicate that employee-owned companies are more highly rated than their peers. One way to summarize the data is how the employee-owned companies ranked. 

Employee-Owned Company Rankings Versus Comparison Industry Group

  EO 100 Company Ranks First* EO  100 Company Ranks Second
Recommend to a Friend 18* 15*
Overall Review 28** 13*
Benefits 33** 9***
EO Companies in Sample 64 64

*Includes one tie
**Includes four ties
***Includes three ties

If the rankings had been random, 11 companies would be at each level. These rankings, therefore, show a strong pattern on employee-owned companies being in the top tier of the ratings on all three measures. Thirty-three companies were first or second on “recommend to a friend,” for instance. A random sorting would have yielded only 22 companies. The difference is even larger for overall and benefits reviews (41 compared to 22, and 42 compared to 22).

A more detailed account will be in our March 2021 newsletter. 

Recommended resource: The research shows that the most effective employee-owned companies are those that create structured programs for employees to share ideas and identify problems. To learn how ESOP companies do that, a step-by-step, example-filled guide is our Beyond Engagement: How to Make Your Business an Idea Factory.