ESOP Education Series

NCEO Study Finds Employee Ownership Provides Significant Advantages in Uncertain Economy

A new survey by the National Center for Employee Ownership (NCEO) finds that workers who own their companies through employee stock ownership plans (ESOPS) have significantly greater retirement security than most American workers. At a time when many businesses are experiencing high turnover rates and staffing shortages, employee-owned S corporations also report better employee retention through a corporate culture that fosters worker satisfaction, the survey reveals.

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“The evidence continues to show that employee-owned businesses and their employees are faring better than most, positioning them to better withstand the challenges of a volatile economy,” said Stephanie Silverman, President and CEO of the Employee-Owned S Corporations of America (ESCA), which commissioned the survey. “As business leaders prepare for possible economic uncertainty ahead, ESOP-owned private firms offer a compelling model for positioning workers and companies alike.”

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Key findings of the survey include:

• S-ESOP leaders report voluntary quit rates of their employees at roughly one-third of the national average.

• Nearly 80 percent of S ESOP leaders feel they are able to do better than their non-ESOP competitors when it comes to retaining and recruiting employees.

• Employee-owners are experiencing layoffs at nearly one-fourth of the national average.

• Nearly 80 percent of S ESOP leaders believe employee-ownership helps them manage economic disruptions.

• Employee-owners are staying put because of the benefits. ESOP respondents estimate that the median ESOP account balance across their participants is $80,500, not accounting for other retirement savings vehicles they provide like a 401(k).