source-library/worker_ownership/ESOPs.md

ESOPs and Employee Ownership

• NCEO (National Center for Employee Ownership) 17
  • Analyzing the effects of employee ownership (typically ESOPs, where workers gain a stake in their company and its stock)
  • Data shows:
    • 33% higher income from wages
      • This holds true at all wage levels
    • 53% longer median job tenure
      • 5.2 years compared to 3.4 years
  • Employee owners also have access to an array of benefits at work including:
    • flexible work schedules
    • retirement plans
    • parental leave
    • tuition reimbursement
    • Childcare benefits (23% of employee-owners compared to 5% of non-employee-owners)
• NCEO Economic Growth Report
  • More data on employee-owner firms
  • Compared to traditional firms, ESOP and companies with employee ownership:
    • Generate 2.5% more new jobs per year
    • Have a workforce that is ⅓ to ¼ as likely to be laid off
• Kruse 02
  • Analysis of a variety of studies on employee ownership
  • Productivity improves by an extra 4-5% on average in the year an ESOP (employee stock ownership) is adopted, and the higher productivity level is maintained in subsequent years.
    • This one-time jump is more than twice the average annual productivity growth of the U.S. economy over the past 20 years.
  • Most studies find higher organizational commitment and identification under employee ownership, while studies are mixed between favorable and neutral findings on job satisfaction, motivation, and other behavioral measures.