While many employers are finding ways to reduce the need for large inventories and large workforces -- and are moving more toward temporary and contract workers -- some are looking to Employee Stock Ownership Plans (ESOPs) to offer their employees a piece of the action.
More than half of Fortune magazine's "100 Best Companies to Work for in America" in the past several years have ESOPs in place.
With so many employee-owned stock options underwater, ESOPs become more appealing to both employers and employees. The money set aside for employees in an ESOP is held in a trust that is not taxed until the employee resigns or retires and begins withdrawing the funds.
An ESOP challenges the traditional business model that focuses heavily on profits for owners and shareholders in favor of a model that shares the wealth. Everyone from the receptionist to the CEO, benefits as the business grows.
The international company Grabber Construction Products Inc., headquartered in Utah, has an ESOP in place. The company is currently 100 percent employee owned. While Grabber is best known for the popular Grabber screws, it has grown to become far more than a screw company.
"We offer a wide variety of construction products," says Bevan Wulfenstein, marketing director for Grabber. "While our identity is certainly centered on screws, Grabber Construction Products Inc., has become a major distributor of a broad range of professional construction products and tools as we have worked hard to broaden our company identity and product offering."
We have seen employees in many companies take a second seat to company profits, especially in today's struggling economy. Morale at many of those companies struggles as employees feel like pawns in a big game where they seem to have no voice and no tangible stake in the interest.
As ESOP-owned companies like Grabber Construction Products Inc., continue to be successful, who wins? Everyone associated with Grabber, from all of its employees to all of its customers, because, with rare exception, those employees are all dedicated to the continued success of the company.
ESOPs are often considered when a company is being sold so the seller can be assured of the continual success of the company, especially if the sale ties back to an ongoing share in the company profits.
ESOPs, however, can be created at any time whenever a company wants to share its wealth among its employees, with the anticipation of generating loyalty that directly translates to a commitment to the success of the company throughout the organization.
Grabber is weathering the recession and the decline in construction spending due largely to its vision of expanding the products it offers, promoting a simplified and consistent company identity (brand) and creating a unified commitment to success by its entire workforce through being a wholly employee-owned company.
Ron Campbell has worked extensively in the job preparation and job search industry. He can be reached at 801-386-1111 or email@example.com.