ESOPs’ Impact on Productivity and Sales

This week I called your attention to an upcoming conference in Minneapolis on employee ownership hosted by the National Center for Employee Ownership (NCEO) and the Beyster Institute.

Also this week, NCEO appeared, as it frequently does, on ESOP consultant Aaron Juckett’s popular popular One-Stop ESOP Blog.  Juckett shared selected findings from NCEO’s compilation Cheap Cialis of research over the last three decades showing the impact of these plans on performance for private and public companies, as well as employee compensation and stock options.

As Winning Workplaces concentrates on the workplace culture effectiveness of small to midsize, privately held firms, I wanted to share the key metrics from this research collection Juckett cites that support the gains in productivity and sales in these organizations that can come with implementation of an ESOP:

• Productivity growth: 2.3%
• Sales growth: 2.4% – 3.8%

When many business leaders look into ESOPs, they focus on the tax incentives (certainly understandable given where the economy is, and with the healthcare reform legislation currently in Congress).  But they should also take into consideration the longer-term benefits of higher productivity and sales that can come from a culture of ownership that creates greater employee engagement.

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