Having a stake in the company keeps you focused, motivated, and engaged—just ask any business owner. This concept extends to employees, too. More companies are finding that employee ownership is a powerful way to boost engagement and accountability.
Employee ownership is still relatively uncommon and challenges the idea that only founders and managers think like owners. Yet, it’s proving to be a win-win, aligning employee interests with business success.
Ownership Models
Employee ownership trusts are a customizable option for companies looking to create a culture of ownership. Success depends on:
- A tailored structure that fits your business model and needs.
- Financing that enhances performance benefits.
- Strategic implementation and rollout.
This approach not only secures your company’s future but also empowers your workforce, turning ownership and business success into a shared venture.
How It Works
Employee ownership typically involves two key features:
- Employees benefit from the company’s success.
- Employee opinions matter regarding company operations.
This setup encourages an owner’s mindset at all levels. Even without a C-level title, employees with a stake in the business feel more invested and aligned with the company’s success.
Leaders considering this path often ask:
- How will the company perform under this structure?
- Who manages the business?
- Who makes vital decisions?
Answering these questions is essential, as employee-owned companies have a clear advantage in attracting and retaining talent.
The Benefits of Employee Ownership
Higher Compensation: Employee-owned firms pay workers roughly 33% more than non-employee-owned firms. Minority workers, in particular, experience substantial salary increases.
Higher Quality Jobs: Employee ownership is associated with better jobs, including access to flexible schedules, generous retirement plans, and childcare assistance. Employee-owners tend to stay longer, with a median tenure of 5.2 years compared to 3.4 years for non-owners.
Ownership Flywheel: Employees with a stake in the company’s success contribute more, improving overall performance and resilience. During economic downturns, employee-owned businesses laid off staff at a fraction of the rate seen in non-employee-owned firms.
Keys to a Successful Employee Ownership Structure
The Right Approach: Tailor your employee ownership plan to your unique business dynamics. An employee ownership trust can be tailored to match your business structure and incentivize desired outcomes.
The Right Financing Model: Align your program’s financing with ownership goals. Employees need to see and feel the benefits of ownership to stay motivated.
The Right Rollout Campaign: Implement the program with intention. Prepare employees to understand their roles and align with the new ownership structure. Working with experienced partners can ensure a smooth transition.
Is Ownership in Your Future?
Employee ownership goes beyond a mere structural change—it’s an investment in your company’s future. This model boosts engagement, accountability, and performance, propelling growth through collective effort. With this foundation, your business doesn’t just grow; it thrives.
