The Great Resignation is a three-word combination that continues to reverberate across the country and the working world. The phrase, which was coined by Anthony Klotz, organizational psychologist and professor at Texas A&M University, describes the mass movement of employees who are leaving their jobs. Mainly a result of the effects of the ongoing COVID-19 pandemic, this phenomenon encompasses the fact that many individuals are reconsidering their current working circumstances and future career movements.
In one of the most complex labor markets in recent memory, U.S. employers face many challenges as they take steps to fill the large number of open positions. From enhanced benefits to unique perks, employers are using drastic measures to keep their team rosters full, while also providing peace of mind for undecided job seekers that their company is the right one to choose.
Among the wide variety of factors for job seekers to consider in a new role, employee ownership is one incentive that may stand out from the rest. As part of this benefit, employees gain an ownership interest in the organization — in the form of shares of stock — through the employee stock ownership plan (ESOP).
The Benefits of Employee Ownership
The National Center for Employee Ownership (NCEO) has studied the relationship between employee ownership and employees’ economic well-being. The results, spanning a range of measures and demographic groups, include the following:
- Median household net wealth among respondents is 92% higher for employee-owners than for non-employee-owners. This disparity holds true for the great majority of subgroups analyzed, including single women, parents raising young children, non-college graduates and other minority groups.
- Employee-owners in this dataset have substantially more job stability than non-employee-owners: their median tenure with their current employer is 5.2 years, compared to 3.4 years for the non-employee-owners.
- Employee-owners are much more likely to have access to an array of benefits at work, including retirement plans, parental leave and tuition reimbursement. For example, 23% of employee-owners have access to child care benefits, compared to 5% of non-employee-owners.
- For families with children ages 0 to 8 in their household, the employee-ownership advantage translates into median household net worth nearly twice that of those working at non-employee-owned companies. In addition, they average nearly one full year of increased job stability, and $10,000 more in annual wages.
Additionally, a 2021 study by NCEO found strong evidence that businesses with an ESOP in place provided greater financial security for employees throughout the pandemic compared to conventional firms.
While it’s hard to predict the future, the U.S. will likely continue to navigate The Great Resignation wave throughout most of 2022. Despite some of its tough setbacks, this trend has created inspiration for some individuals and companies to reexamine goals, needs, wants and aspirations in the years to come. In fact, “The Great Reset,” “The Great Reimagination” and “The Great Realization” are just some of the many forward-thinking descriptions being used at this moment in history.
With a variety of job opportunities to consider and incentives to weigh during this time, employee ownership is a benefit that can create many positive impacts in the lives of employees that choose to establish a career at an employee-owned company.
Employee-owners aren’t the only ones reaping the benefits of an employee-owned company. Clients and customers of these companies also see a big upside.