October 28, 2020

How Our ESOP Helped Us Become One of KC’s Best Places to Work

October is Employee Ownership Month, and this year we celebrated it along with Dialectic’s recent recognition as one of Kansas City Business Journal’s Best Places to Work (BPTW). There are a lot of reasons we’re a BPTW winner, but one of the biggest is something I’m passionate about: our employee ownership model.

We became a 100% employee-owned company with an ESOP (employee stock ownership plan) in 2015, the year after I joined Dialectic. Theoretically this structure means every employee is part of the company’s leadership and ownership. As we wrap up our fifth straight year of positive growth amid the chaos that is 2020, I’ve been reflecting on how Dialectic’s ESOP culture has helped prevent layoffs, nurture a more resilient workforce, and continue delivering at a high level for our clients.

Higher morale, lower turnover

Rutgers University’s Institute for the Study of Employee Ownership and Profit Sharing reports “turnover at employee owned companies is three times lower than at conventionally owned businesses.” I can attest to that. Through this turbulent year, our ESOP’s strength has provided us with the stability and flexibility to avoid layoffs. We’re fortunate we haven’t suffered from the flagging morale that seems to be the norm right now. The peace of mind that comes with knowing their jobs aren’t on the line due to the pandemic has only strengthened our employee-owners’ resolve to continue our company’s success.

Greater accountability, more diversity 

Our ownership culture means we’re all invested in the company’s performance, and that drives us to a higher level of accountability—to each other and to our clients. We’ve worked hard to build an environment that feels like family. We deliver for our clients and for each other because if we don’t, we’re only hurting ourselves.

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KC Best Places to Work

Image courtesy of Dialectic Engineering

We work together to determine what’s best for Dialectic, and one of the things we agree on is that great design doesn’t have to be the death of a great culture. Much of the engineering industry is stuck in outdated partnership models and the silos that come with them—not to mention the dress codes. We reject all of that and have embraced a flexible, open, collaborative environment where diversity and inclusion aren’t just words written in the employee handbook. When we say we’re engineering a better experience, that’s just as true for our internal team as it is for our clients.

More productive, more engaged

We’re passionate about the work we do, and that starts with recruiting people who truly want to be here. We practice financial transparency throughout the organization, and employee-owners receive continuous feedback so they always know where they stand and how they can advance their careers with us. An informed workforce is a more engaged workforce, which translates to higher productivity. We work harder for one another and for our clients because it’s what is best for the company we own.

Higher profitability, faster growth

“I fundamentally believe that employee ownership of our company through stock is foundational to our success, because it gives every employee the opportunity to benefit from our performance and puts them all on the path toward building long-term savings.” -Dan Schulman, PayPal CEO

The National Center for Employee Ownership reports research showing “ESOP companies perform better in the post-ESOP period than their pre-ESOP performance would have predicted.” I believe that’s because we make decisions based on what’s best for our employee-owners, not for just a few shareholders. We engage them in running the business, encouraging everyone to think and act like owners. 

The true beauty of an ESOP is our employees directly benefit from the fruits of their labor, with quarterly and annual bonuses as well as stock shares awarded to them every year. All of our culture-building strategies are based on equally and continually improving benefits, and this is without the implication of taking equity or distributions away for the principles that exist in the traditional model. Our ESOP/Culture Team is a strategic group of volunteer employees that plans monthly activities, organizes our annual meeting, and participates in benefit selections. The ESOP/Culture Team is an influential part of our management’s litmus test on what programs will benefit the employees. Many of us spend more time with coworkers than our families, so we want to spend that time in a meaningful, fun, and productive environment. Although that looks different because of the pandemic, we still prioritize our employees’ wellbeing. In fact, not long ago I created a company-wide mental health day and gave everyone $50 to spend on doing something for themselves.

Being an ESOP sets us apart from other companies. It’s part of the reason we’re one of the Best Places to Work in Kansas City. And it’s the right thing to do—for our employees, our clients and our community.

Greg Trees is CEO of Dialectic Engineering, delivering exceptional results in distribution, commercial, retail, restaurant, health care and hospitality design projects. Founded in 1988, Dialectic is a 100% employee-owned, nontraditional mechanical, electrical and plumbing engineering firm that brings buildings to life across a broad range of verticals. Learn more at dialecticeng.com.