5 Reasons Why You Should Work with (and For!) an ESOP Company
October is ESOP month, which makes it a fantastic time to celebrate all the reasons why working with, and for, and ESOP company is a good idea. Before we get into the reasons why, however, let’s explore what an ESOP is and give some examples of ESOP companies in the United States.
What is an ESOP?
An employee stock ownership plan (ESOP) is a contribution plan that provides employees in a company with retirement savings at no cost to the employee. Essentially, employees in an ESOP have real equity in the companies they work for. According to the National Center for Employee Ownership, there are around 6,600 ESOPs in the country with more than 14 million participants. You might recognize a few names on the major ESOP company list: Publix Super Markets (200,000 employees), Amsted Industries (18,000 employees), and WL. Gore and Associates (the makers of Gore-Tex, with 10,720 employees).
To celebrate ESOP month, we want to list some of the many reasons why working with, and for, an ESOP company is something you should consider.
- According to the NCEO, ESOP companies are more than 25% likely to stay in business and employees of ESOPS were four times less likely to be laid off in recent recessions. It’s important to building owners, contractors, and engineers that the companies they do business with will be there for them. Over 10 years, ESOP companies have 25% higher job growth over comparable companies. The success of every ESOP company means that business and jobs are more secure on average.
- Building of community wealth. Employee-owners at ESOP companies have more than two times more in their retirement accounts than employees in other companies. Additionally, employee-owners at ESOP companies receive 5-12% more in wages on average.
- Because employee-owners are invested in the long-term success and growth of their ESOP, productivity typically improves by 4-5% on average in the year the ESOP is adopted. You want your calls returned? Call an ESOP!
- Customer service. Speaking of returning calls, can you imagine how much more invested employees are in a company that they have a stake in? Employee-owners want their company to be successful. They address issues head-on, put forth their best efforts, and, in general, work like they own the company.
- Earning success. ESOP companies on average increase sales just over 2% each year on average. Employee-owners inspire loyalty in their customers and earn more business every year from existing customers and from new customers eager to experience extraordinary customer service.
It’s easy to see why employee-owners at ESOP companies are fully invested in both the short- and long-term success of their company. At the Hoffman Family of Companies, we take pride in the efforts of our entire team who work hard to make every customer an evangelist of our represented products and service. Interested in learning more about ESOPs? Visit the NCEO or just talk to your local Hoffman & Hoffman representative!