WASHINGTON – A new survey by the National Center for Employee Ownership (NCEO) finds that workers who own their companies through employee stock ownership plans (ESOPS) have significantly greater retirement security than most American workers. At a time when many businesses are experiencing high turnover rates and staffing shortages, employee-owned S corporations also report better employee retention through a corporate culture that fosters worker satisfaction, the survey reveals.
“The evidence continues to show that employee-owned businesses and their employees are faring better than most, positioning them to better withstand the challenges of a volatile economy,” said Stephanie Silverman, President and CEO of the Employee-Owned S Corporations of America (ESCA), which commissioned the survey. “As business leaders prepare for possible economic uncertainty ahead, ESOP-owned private firms offer a compelling model for positioning workers and companies alike.”
Key findings of the survey include:
- S ESOP leaders report voluntary quit rates of their employees at roughly one-third of the national average.
- Nearly 80 percent of S ESOP leaders feel they are able to do better than their non-ESOP competitors when it comes to retaining and recruiting employees.
- Employee-owners are experiencing layoffs at nearly one-fourth of the national average.
- Nearly 80 percent of S ESOP leaders believe employee ownership helps them manage economic disruptions.
- Employee-owners are staying put because of the benefits. ESOP respondents estimate that the median ESOP account balance across their participants is $80,500, not accounting for other retirement savings vehicles they provide like a 401(k).
The study’s release follows the introduction of new bipartisan legislation by U.S. Senators Ben Cardin (D-MD) and Steve Daines (R-MT) – the Promotion and Expansion of Private Employee Ownership Act of 2023 – that would provide better incentives for employee ownership, as well as much-needed technical assistance for those companies that are interested in forming an ESOP.
The NCEO’s survey, which reflects responses from more than 100 executives of ESOP-owned companies, follows others that have clearly demonstrated benefits to workers and companies of the ESOP-ownership model. A 2022 study by NCEO found that employee ownership provided exceptional resiliency and financial security in the face of pandemic-driven economic challenges.
A 2021 survey of workers at ESOP companies by John Zogby Strategies found that those workers reported being far better off financially than other U.S. workers, many of whom were hit hard economically by the COVID-19 crisis.
- To read NCEO’s full findings, CLICK HERE.