Studies show that employee-owners at S corporation ESOP companies have a higher level of employee commitment to their company than those in the general private sector. This fact was again noted in the most recent publication of Forbes Magazine in a cover story titled “100 Best Companies to Work for in 2012”. Coming in at number 26 on the list is employee-owned Burns and McDonnell Engineering, an ESCA Board company. One of the listed reasons for this distinction: the company’s incredibly low turnover rate, below 4%.
Burns and McDonnell is not an outlier in the employee ownership world as many S-ESOP firms enjoy this same commitment from their employee-owners.
One explanation is the significantly higher retirement savings that employee-owners accrue compared to the private sector. A 2005 study by the National Center for Employee Ownership found that employee-owners’ retirement accounts were three to five times larger than the average 401(k) plan. These benefits encourage talented workers to stay with their company and perform at the highest level, because they are ultimately invested both personally and financially in the success of the company.
As one might expect, employee commitment is beneficial to the worker, to their company, to the communities they work in, and to the economy as a whole. A study published by the University of Pennsylvania found that the increased job stability found in employee-owned companies saves the greater economic community approximately $3 billion each year. Further, an ESOP helps employee-owners plan for a secure retirement, which also provides peace of mind and stability in these difficult economic times.
Congratulations to Burns and McDonnell on your recognition in Fortune Magazine’s 100 Best Companies to Work For in 2012! Thank you for illustrating to the wider community the numerous benefits of employee ownership.