● Springfield, Ohio, manufacturer Valco Industries celebrated the one-year anniversary of its sale to an ESOP recently at a local brewery. Employees of the 80-employee metal fabricator said that it can take time for employees to grasp the importance of the ESOP, but that attitudes do change. Joe Guinn, 45, who has been with the company for 10 years, said, “Younger employees aren’t thinking, ‘I have to keep doing a good job, my retirement would be nice.’ They’re thinking, ‘What am I doing this weekend?’”
Cody Evans, who has been with the company for five years, told the paper that this perspective can change over time. Now 30, he said that at some point, “You start realizing that one day this is going to end and I need to make sure that I’m secure.” A greater sense of connection with the company, he added, “Is a great thing to help with that.” Adrian Watson, who grinds and sandblasts metal products, agreed, “I’ve got two kids now, and I’ve got to make sure they’re squared away for the future, not just me.”
●Liberty, Missouri, ESOP Ferrellgas Partners celebrated Earth Day by capping of a month of community service. The propane retailer and its thousands of employee-owners, in conjunction with their partners at Blue Rhino, another company in the natural gas industry, committed to 30 days of service under the theme #FerrellFuelsChange. Over the course of 30 days, both frontline and executive employees at both companies committed to at least one hour of service each in their community, totaling over 5,000 hours of community service. Their efforts culminated in service work for Earth Day. Among the initiatives were tree planting, hosting battery and plastic recycling drives, and more. Speaking on the initiative, Ferrellgas COO Tamria Zertuche said, “Earth Day has always been special to us, but our employees sought to do even more this year in the many communities we serve. I cannot be prouder of their creative solutions and the impact these projects will have.”
●In what might be described as “proof of concept” for private equity firm KKR’s Ownership Works initiative, KKR sold C.H.I. Overhead Doors to Nucor, providing both tenfold ROI to KKR and six-figure payouts to C.H.I. employees. All 800 employees had stock, allowing them to participate in the $3 billion transaction. KKR took control of C.H.I. in 2015, converting the firm to employee ownership and dramatically overhauling its operations. The acquisition of the garage door industry leader will see an average payout of $175,000 to employee-owners, with the longest tenured employees earning even more. The sale is an incredible example of the power of investing in employees, not only in cash but with autonomy and buy-in. KKR and C.H.I., in addition to the employee ownership plan, went to great efforts to make sure employee voices were heard, with many changes stemming therefrom, including increased safety, an improved cafeteria with healthier food options, an onsite health clinic, and more.
A number of articles in the past month have touted the benefits of employee ownership, especially with regards to recruiting and retention amid the “Great Resignation.”
● In an article for Forbes titled “In the War for Talent, Want an Advantage in Recruitment and Retention?”, Mary Josephs, founder and CEO of Verit Advisors, looked at a number of recent research reports in conjunction with noted ESOP Hypertherm as a case study on how ESOPs have outpaced their non-ESOP counterparts with regards to employee recruitment and retention. After discussing how Hypertherm has used their ESOP to create buy-in and engagement among their associates, she writes that “study after study finds that employee ownership generally makes a genuine difference in hiring and retaining talent, an advantage that has been critical during the Great Resignation that erupted during the coronavirus pandemic. From 2014-2017, turnover at ESOPs was 10.8%, vs. 27.1% at non-ESOPs, according to National Center for Employee Ownership statistics.” She notes that ESOPs have space to improve with regards to recruiting and retention, especially when communicating just how important retirement plans are to young workers.
● In a different article for Forbes titled “Happiness: The Way to Win Your Employees’ Loyalty,” Kimberly Jones, president and CEO of NCEO member company Butler/Till, elaborates on tools and strategies for combatting the increase in employees who are quitting their jobs. Jones extolls the benefits of employee ownership as a tool of retention, in addition to increased flexibility with regards to schedules and workplaces, and meaningful opportunities for training, development, and career advancement. Citing a recent study we conducted on behalf of Employee-owned S Corporations of America (ESCA), Jones writes, “Having ownership in their employer incentivizes people by giving them a vested interest in the success of the business and, ultimately, leads to money in their pockets. A recent study shows that ESOP participants have nearly twice the average retirement balance of those employed by companies that are not employee-owned, which goes a long way in strengthening retention.” She argues that this tangible financial ownership, when combined with the aforementioned flexibility and professional development opportunities, will give companies a competitive edge in keeping their employees happy and, ultimately, loyal.