Employees as owners? Works for us!
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“My staff would care about their jobs more if they knew what it felt like to be in my shoes,” said every business owner at least once. What if you gave your employees the chance to feel an ownership stake by providing them an ownership stake in the company? We did and its working.
Our business is headquartered in Indianapolis, and we have remote and in-office employees in 40 cities across the country. Being so spread out across the country, it’s critical our company maintains a positive culture to foster staff loyalty. We want each and every employee, wherever they work, to feel part of a larger team with the same goals. To that end, we decided to give our staff more skin in the game and created an Employee Stock Ownership Plan (ESOP).
ESOPs as part of company culture
Google the words “company culture” and you’ll likely get more hits than you could read in a lifetime. To me, all those discussions could be boiled down to one question: “How can you create an environment in which staff enjoy their jobs?” That’s just my simplified version of entrepreneur and motivational speaker Adam Mendler’s definition. He describes company culture as the “combination of people, vision and values that ultimately defines the atmosphere in the workplace and shapes how much you enjoy coming into work.”
I’m not one who thinks the workplace needs to be a playground, but I do think it’s important that our team members enjoy their work. In my experience, people like working where:
- they feel recognized and appreciated,
- they know their work matters,
- they’re challenged by interesting work, and
- their out-of-work life is respected.
Our company culture is built around those priorities, and our new ESOP further supports them.
Sharing our success
Businesses often use some version of the phrase, “Our success is in our people.” While the words may be a bit overused, they’re absolutely true. We would not have our achievements without the hard work and great ideas of our team members. The work we do depends on positive personal relationships with our clients and with our jobseekers, so our team members are vital. Providing the ESOP for our team members allows us to share the success of LGC with the people who helped build it.
Benefiting in a larger way
For many people, “having work matter” means their job is connected to a greater good. As a staffing agency, our team members have the daily satisfaction of connecting jobseekers with positions and helping employers find trained staff to meet their needs. Now that we’ve added an ESOP, “having work matter” also means that as the company prospers, our team members do too. They see that their work benefits them not only in terms of a paycheck, but also with a financial stake in the overall financial health of the company nationwide.
Reducing turnover
Every employer knows that turnover is costly and that it cuts into productivity and morale. When a person leaves, their knowledge goes with them, and remaining staff are left to take up the slack. All the money that went into training them is lost if the person leaves before being able to make a real contribution to the team. Our ESOP motivates employees to stay with LGC for the long term, thus reducing turnover and saving the company money.
Rowing in the same direction
Ever have the feeling that your team members don’t share the same priorities? They may be working hard, but if they’re working toward different goals, your company isn’t moving – or at least not in the direction you want it to. We’ve found that having an ESOP has strengthened our team because we’re all working together towards one goal. It’s much easier to focus everyone’s attention on company priorities and get buy-in when everyone has skin in the game.
Creating loyalty through financial stability
Morningstar did a fascinating study in 2020. They looked at people of all ages, genders, and educational levels and found that – no matter what their income – individuals were more emotionally at ease with their finances if they had a sense of personal power over their finances. It wasn’t the amount of money involved; the study showed that people who feel empowered had mostly positive experiences with their finances, even in the lowest income ranges. With an ESOP, our team members are empowered to create long-term financial stability through a retirement plan. They know their efforts on the job directly impact the success of the company and thus their financial well-being. That type of motivation creates loyalty among team members difficult to match in any other way.
The next time you wish your employees knew what it felt like to be the owner, consider giving them the chance. Your company and your people will thank you!
George Lessmeister is CEO and founder of LGC Hospitality, a national staffing firm headquartered in Indianapolis. LGC has offices in over 40 U.S. cities.