Article written by:
Brian Bornino, CPA/ABV, CFA, CBA
Director of Valuation Services
As long-time advocates for employee ownership through Employee Stock Ownership Plans (“ESOPs”), we at GBQ suspected that ESOP-owned companies would have a major advantage during this COVID-19 crisis…and now we have the proof that this is true!
In its July bulletin, the National Center for Employee Ownership (“NCEO”) published the results of a survey from 160 ESOP companies on how these companies are handling the COVID-19 crisis and other issues, including questions about their employee turnover rates. The surveyed ESOP companies reported dramatically lower employee turnover than overall national averages, both in terms of voluntary and involuntary employee terminations. The ESOP advantage persisted across many industries, with ESOP companies in many industries demonstrating turnover rates less than half of national averages for their industry. See the tables below for details, with national data provided by the Bureau of Labor Statistics.
These statistics do not surprise us, as we have observed that our ESOP-owned clients have a competitive advantage with regard to employee attraction and retention relative to many of our non-ESOP-owned clients. The valuable economic retirement benefit that ESOPs provide to their employees makes it a much tougher decision for employees to leave their ESOP-owned employers.
GBQ has a national ESOP advisory practice with 100+ ESOP-owned clients. Additionally, we advise countless business owners on the advantages of ESOPs and offer ESOP feasibility studies and ESOP implementation services for companies that want to install ESOPs in their companies. We recently held a series of ESOP webinars detailing the amazing advantages of ESOPs, including the potential to improve employee attraction and retention. If you are considering an ESOP or would like to learn more about the tremendous business and financial advantages of employee ownership through ESOPs, please contact us.
In addition to ESOP feasibility studies, we often offer opportunities to obtain complimentary ESOP education. To access our webinar series recordings discussing ESOP advantages, click here.