WASHINGTON – Writing in Forbes, Mary Josephs, the founder & CEO of Verit Advisors, explains that a growing body of research confirms the exceptional benefits that flow to employees and businesses through employee stock ownership plans (ESOPs).
For example, a “survey, by John Zogby Strategies on behalf of the Employee-Owned S Corporations of America, also found that ESOP employees experienced dramatically less financial adversity during the pandemic and had more stable jobs and better housing security and retirement savings than their non-ESOP counterparts. This study documented that non-ESOP employees reported downsizing or job losses at six times the rate of their ESOP counterparts. And no ESOP employees surveyed were behind on their mortgage or rent versus over 25% of their non-ESOP peers.”
“This stronger performance, I believe, demonstrates the worth of the principles and standards that many ESOPs live by. Together, these values represent a significant advantage in today’s riskier world,” Josephs writes.
She continues: “In articulating the values that drive their responsibility to employees and their communities, ESOPs are ahead of the curve. A new study by Edelman, an authority on behaviors that build trust, found that the predominant employee today is ‘belief-driven,’ as apt to seek employment and stay with a company because it is values-driven as is a consumer in buying and sticking long-term with a brand. In the current talent wars, this values-based approach proves an advantage for employee ownership. Given ESOPs’ statistically superior track record against non-ESOPs in bad times and good, retirement-minded business owners who contemplate selling all or part of their business would do well to seriously explore the value – and differentiating values – of an ESOP.”
Decades of research demonstrate that working for a private ESOP company helps American workers be better equipped to weather financial challenges or economic downturns, and that ESOP companies tend to weather economic storms better than other businesses.