The ESOP Association and the National Center for Employee Ownership (“NCEO”) both recognize October as Employee-Ownership Month. Employee-owned companies embrace this time to celebrate, engage with local government officials, and promote the benefits of employee-ownership. Some companies use this time for community service projects. For example, several Andesa employee-owners will visit schools and college campuses this month to talk about careers in Science, Technology, Engineering and Math (STEM).
Andesa is a 100 percent employee-owned company via an Employee Stock Ownership Plan (ESOP). An ESOP is an employee benefit plan which places company stock into a Trust for which the employees are the beneficiaries as part of their retirement benefits. According to the NCEO, about 14 million Americans are in ESOPs, which hold about $1.4 trillion in equity.
More importantly, employee-ownership strives to address the wealth disparity challenge facing our country. A recent study by the Aspen Institute entitled Race and Gender Wealth Equity and the Role of Employee Share Ownership found that workers participating in ESOP’s have greater access to retirement benefits when compared to all workers in the US population, including greater access to a second retirement plan, typically a diversified 401(k) plan (97% to 51%).
Using data from the National Longitudinal Surveys of the Bureau of Labor Statistics, the NCEO also recently released research showing that the median household net wealth among respondents in employee ownership plans was 92% higher for employee-owners than for non-employee-owners; employee-owners of color have 79% greater net household wealth. Employee-owners also had higher wages and greater job stability.
In reflecting on Employee-Ownership Month, I sat down with several Andesa employee-owners to chat about what employee-ownership means to them. As they each shared their stories and experiences, I was struck by four common themes:
- Employee-owners value culture
- Employee-owners place team ahead of self
- Employee-owners voices are heard
- Employee-owners see ownership as a journey
I’ll share a little bit of insight from Alice, Nick, Cecilia, Jake and Justin. “Quotes” from our conversations are sprinkled throughout the key takeaways.
Employee-owners value culture
“I’m grateful for ownership, but I don’t think our culture is because of the ESOP. It is the culture that this company is being built on and it just continues to go. I can honestly say that I have never enjoyed working with so many people in any other company. I have made a lot of relationships with a lot of different people here at Andesa and it is the Andesa culture.”
While Andesa had a strong culture prior to becoming 100% employee-owned, it was the sharing of financial information, the adoption of a company-wide versus team or individual based bonus program, and the sharing of an ESOP account statement that made ownership feel real. Despite the financial connection, being part of a team, being surrounded by individuals in pursuit of a common goal, guided by a common set of values that was important to the group.
Our employee-owners embrace the core values of the organization and that matters. They demonstrate the values through their actions and serve as role models for teammates. They consistently provide support and care for their teammates. “With us being owners of the company. It really puts the responsibility on us to make sure that we’re doing the best that we can to make sure that the whole company’s succeeding. Ultimately, we all know that that comes back to reward us in the end because of our investment in the ESOP.”
Employee-owners place team over self
“Thinking back, before we moved into the ESOP, my experience was pretty limited to just the operations department. It’s difficult for me to think back to anything I observed or learned from other departments. But ownership is like a scope change – it shifts your focus a little bit. Now it’s not only am I succeeding on my project but is my neighbor in the next cube succeeding on their project? How can I help them?”
I was thrilled to hear my fellow employee-owners demonstrate an enterprise mindset versus a “WIIFM” or “what’s in it for me” attitude. They hold themselves to a high standard and personally strive to deliver excellent results. In their understanding of the big picture, they appreciate that organization growth and success overshadow any departmental or individual wins.
Great employee-owners serve as excellent role models for newer teammates. They demonstrate and live the values and expected behaviors of the organization. “From the values perspective, being accountable, being honest, they are fundamental values. It doesn’t matter if we are employee-owned or not. Knowing those values is easy, speaking with those values is easy, practicing those values every day, every hour can be difficult.” They model the way things are supposed to be done and help their teammates grow. They push the team to deliver a better customer experience.
This broader perspective encourages employee-owners to provide mutual support and put team ahead of self. They share their knowledge with new teammates in order to create a sense of belonging and develop a stronger team. The whole becomes much greater than the sum of the parts. “We are all in this together.”
Employee-owners voices are heard
“I would say the opportunity to have a bigger voice and to be heard within the company and be able to be in on different conversations. I know in many companies, a lot of people don’t feel like their voices are heard really ever. I feel like mine’s heard pretty frequently with a lot of different things we work on and all the different tasks in my vertical that are being handled. So that’s definitely something I’m thankful for.”
At Andesa, we frequently engage employee-owners in collaborative problem solving. Employee-owners participate on many teams or task forces to observe, interpret and make intervention recommendations concerning strategy, culture and project specific opportunities. The sense of ownership drives a recognition that employee-owners are part of the solution. They seize the initiative and make their thoughts and ideas known to the decision makers in a respectful manner to benefit the customer and the organization.
“I’m thankful for unity between everybody. Everybody has a voice because everybody is working towards the same goals, so that’s a little added layer of culture. We’re not just some small insignificant piece inside of some huge corporation where we don’t really matter. And we are seeing these rewards.”
Employee-owners see ownership as a journey
“When new people come in their focus is on trying to learn the job, right? You’re trying to learn the company. You’re trying to learn your task, you’re trying to learn a job, you’re trying to see where you fit. It isn’t Broad. Broad can be overwhelming. Overtime, the perspective changes and they begin to think like an owner. They begin to see the whole business not just their little portion of the business. I think it has something to do with employee ownership.”
Despite what many may believe, ownership is enduring – not a quarterly experience. In an ESOP, shares are accumulated in an employee’s account over time. Vesting increases with years of service. Strong performance of the organization can lead to an increase in the value per share over time As a retirement benefit, the reward is a delayed transfer of wealth rather than an immediate windfall. “I just hit the six year. So now I’m at that hundred percent. So now it means something completely different to me.”
Culturally, the employee-owner’s perspective changes over time as well. There is an initial emphasis on learning the tasks, business, processes, industry which makes the employee a valued contributor. Personal growth and maturity over time allows the employee-owner to consider how they personally contribute to the strategy and goals. Embracing the values and understanding the priorities of the company leads to a better customer experience and even greater team success – circling back to reward the employee-owner for their contribution and growth.
None of this happens overnight – and the loyalty, consistency, commitment, and perseverance are valued in an evergreen journey.
Happy Employee-Ownership Month!! My appreciation to Alice, Nick, Cecilia, Jake, and Justin for sharing your ownership perspectives and insights with me and our blog readers. Andesa is fortunate to be owned by such thoughtful and committed individuals carrying out the Andesa Forever vision.