New Study Shows ESOP Companies Have Lower Turnover Rates

Study also finds that companies emphasize ownership culture is the best tool for retention and recruitment.

A new NCEO survey finds that the average voluntary quit rate for ESOP companies was 11% and the layoff and discharge rate 7%. That compares to an average quit rate for US companies of 26% and an average layoff and discharge rate of 15%. The comparison numbers are based on the Job Opening and Labor Turnover Survey (JOLTS) from the US Bureau of Labor Statistics, a stratified random sample of approximately 21,000 nonfarm business and government establishments. The findings on better retention rates in ESOP companies echo what previous studies have found.

The study found that ESOP respondents generally feel positive about the impact of being employee-owned on recruitment and retention, with 31% saying it has a very positive impact and 54% saying it has a “somewhat” positive effect. Fewer than 1% of respondents said it had a negative effect. Among the companies saying they were able to judge how their turnover rates compare to their competition, 45% said they compared favorably, 6% unfavorably, and 49% were unsure.

When looking at the words most often used by respondents to describe retention strategies, “culture” stood out. One respondent said that what really mattered was creating a culture of caring and respect, and standing by that, no matter what. Likewise, on the recruitment side, offering referral bonuses and emphasizing culture were deemed the most impactful, scoring higher than emphasizing the financial benefits of ownership.

These findings are part of a much larger NCEO analysis, the 2026 ESOP Recruitment and Retention Survey Report, which provides a detailed analysis of what ESOP companies say about the impact of being employee-owned on recruitment and retention and which approaches work best. NCEO members can read a summary of the findings in our newsletter article on the topic.