At Emery Sapp & Sons (ESS), our Employee Stock Ownership Plan (ESOP) is the foundation of our company’s values. Being employee-owned has allowed ESS to create strong legacies, provide our employee-owners with stability and job security, more business continuity, and build up the coffers in everyone’s retirement funds. If you’re new here, you might be asking yourself, “What the heck does all of this mean and why does it matter?” Let’s quickly go over what being an ESOP company means before diving in any further.
In case you didn’t know, ESS is a 100% employee-owned company. This means our company is 100% owned by the people who work here. Being an employee-owned firm is integral to our company identity. It serves as a cultural catalyst, elevates our recruitment and retention strategies, and inspires high performance amongst current employee-owners. Our ESOP gives every eligible employee-owner the opportunity to own ESS Shares. This establishes a direct link between the company’s performance and our personal wealth. Pretty good stuff, huh? Now, let’s dive into all of the great aspects of an ESOP and how our people and partners benefit.
ESOP Companies Offer Job Stability & Security
It is important to compare how ESOP and non-ESOP companies performed during the COVID-19 pandemic. During this time, job stability and security became even more important because of the threat it posed to employment. ESOP companies outperformed conventionally-owned businesses in several different aspects, such as work hours, salary, job retention, and workplace health and safety. A study conducted by Rutgers University and SSRS found that employee-owned firms were:
- 3-4 times more likely to retain non-manager and manager employees
- 3.2 times more likely to retain staff
- Significantly less likely to reduce employees’ hours or pay
- More likely to provide employees with personal protective equipment, such as gloves and masks
During such a time of uncertainty, employee-owners were able to have a strong sense of financial and job security. ESOP companies retained or added an additional six employees from 2019 to 2020 compared to traditionally ran companies at the start of the pandemic (NCEO, 2021). Additionally, on average, employee-owned companies’ ESOP accounts are twice as large as those held in 401(k) accounts. Cha-ching!
Being an ESOP Strengthens Our Employee Retention & Business Continuity
Being a construction company, job recruitment and retention is a challenge. With a turnover rate of nearly 30% industry-wide, it is crucial that we offer something that will keep people around for the long haul. Being an employee-owned company gives ESS just the advantage we need to recruit and retain top talent.
Chief Administrative Officer and General Counsel Amy Allen explained the impact employee retention has on a company’s durability. “Employee retention is the key to a company’s continuity,” Allen said. “If the employee turnover rate is high, it can inhibit a company’s ability to carry out its mission and will negatively impact opportunities for growth.”
She also shared that employee turnover causes a loss of institutional knowledge, which in turn creates significant replacement and training costs to bring on new employees. Incidentally, when employee retention is high, so is company morale. “Being an ESOP and being ‘in it together’ is a significant contributor to increased employee retention, and consequently, continuity.”
Being 100% Employee Owned Fortifies Our Legacy & Builds Wealth
Our ESOP plays a large role in continuing our company legacy of building wealth for our people. The ESOP isn’t a get-rich-quick scheme, but if you’re loyal and build your career here – it can pay off big time. ESOP account balances at ESS can reach sizable amounts – just ask one of our 41 employee-owners who’ve racked up more than $1 Million! Project Superintendent Mike Crane has been with ESS since 1994, and has reached millionaire status. 😎 His advice to younger employee-owners?
“Stick it out and work hard. It is absolutely worth it. There is a misconception that the ESOP isn’t real or won’t matter to you. Take it from me, a guy that started as a laborer at $7 an hour. It is d*mn real, and it’s made a difference for me and my family. It will do the same for you.”
Since our founding in 1972, ESS has grown significantly and we don’t forecast a slowdown anytime soon. This is really a testament to the stability and security an ESOP can offer. With our ESOP as the foundation, we are equipped to continue our legacy for the next 50 years. Our current employee-owners should be pumped to forge their future with extreme ownership. If you’re not an employee-owner yet…what are you waiting for!