American businesses can lose as much as $550 million each year due to disengagement at work. Many companies put great effort into keeping their employees motivated. This has been achieved by paying workers competitive wages and giving them ownership rights in the company they work for. ESOP is one of the most popular ways to create an employee-owned business.

Employee ownership refers to a kind of corporate ownership in which workers are granted a share of the stock in their employer's corporation and some measure of influence over the management and day-to-day operations of the company. In most situations, workers are granted the authority to elect their executives, purchase equity in the company at prices lower than the market value, and take part in the process of making corporate choices.

The concept of employee ownership promotes loyalty and a feeling of ownership, both of which may lead to increased productivity for a business. This is one of the main benefits of employee ownership. Therefore, employee ownership in a company has the potential to have a favorable impact on the expansion and profitability of that company. On the other hand, not all variations of employee ownership firms are regarded as "best practices" or beneficial to the company.

Why Employee-Owned Businesses Are Successful

According to the Employee Ownership Foundation, employee-owners have different views of their company, job, and responsibilities. This helps them work more efficiently and increases their chances of success. Employee-owners have a greater responsibility for their employees' performance and that of their coworkers because they share in the company's success. An ESOP is a trust fund that an employer sets up to benefit its employees.

Publix Super Markets

It has more than 225,000 employees and 1,272 stores. Publix's retail sales increased by almost 18% in 2019 to $44.9 billion. According to Forbes magazine, this makes Publix the fifth-largest privately owned company in America in 2019. The company was founded in 1930 by George W. Jenkins. It grew slowly to become the largest supermarket chain in America. Regardless of their rank, Publix employees are eligible to receive stock company stock after being with the company for over 12 months.

Penmac Staffing

A temp agency helps job seekers connect with employers. Patti Penny founded the company in Springfield, Missouri, in 1988. She originally set out to find temporary workers for her husband's company. The company has grown from a small office to 32 offices in eight states. Today, they serve more than 1,200 business clients. The National Center for Employee Ownership, Penmac ranks second in the country with 28,000 employees, according to July 2020 data.

Brookshire Brothers

According to the NCEO's 2019 ranking, Brookshire Brothers was ranked 13th among all employee-owned companies in the United States. Brookshire Brothers currently employ over 7,000 people and own numerous convenience and gas stations in Texas and Louisiana.

WinCo Foods

WinCo Foods was originally called Waremart and opened its first store in Boise in 1967 as a warehouse-style grocery shop. The company's focus on low prices allowed it to continue growing and opening new stores, mainly in the Pacific Northwest. Employees around 20,000 employees own 131 grocery stores.

After working 500 hours during their first six months, employees can join WinCo's Employee Stock Option Plan (ESOP). They must also work at least 1,000 hours per annum to keep their participation. WinCo's unique ESOP feature is that the company, not the employee, makes contributions.

Robert W. Baird & Co.

Another established company in finance is an employee-owned business. Baird invests in lower- to mid-market companies that are active in many industries. However, they primarily focus on the technology, healthcare, and industrial solutions sectors. Baird invests at all stages of growth in companies, from those just starting to companies with over $150 million in revenue. Baird offers wealth management and investment banking services for both individuals and businesses in addition to private equity financing.

Recology

A San Francisco-based company for waste management employs over 3.600 people. Recology has 45 locations providing trash removal and recycling services for approximately 112,000 commercial and 889,000 residential customers throughout Washington, California, and Washington. Recology, which is 100% owned by employees, began its ESOP program in 1986. The plan provides employees with a 401(k) and a supplemental retirement program.

Conclusion

An employee ownership program is a great way for staff to stay motivated and focus on the company's success. Many American corporations are owned entirely or partially by employees. These companies are called employee-owned. These corporations use programs like the Employee Stock Ownership Plan (ESOP) to allow their employees to purchase company shares over time.

Publix Super Markets, America's largest employee-owned business, is today the largest. Publix's founder's family owns 20%, with the remainder owned by current and past employees. WinCo Foods and Recology are two examples of successful businesses 100% owned by employees. Penmac Staffing is another example.