Canadian employee ownership,  Communication,  Culture,  Employee Ownership,  Employee Ownership Trust,  employee-owned company,  EOTs,  ESOP Benefits,  participative culture,  Retention,  Succession planning,  Talent attraction

The Joy of Employee Ownership

December 12, 2024 /

More pie, happier employees

Employee ownership, based on TRUST, makes employees HAPPY. That is the Joy of Employee Ownership.

Many businesses today face intense struggles in developing and retaining really good employees. In fact, this may be one of the most important factors affecting a company’s success and ability to grow and be profitable. Establishing a culture of trust will support the retention of good employees and the attraction of qualified new ones.

In a company full of responsive and happy employees, morale is high, innovation thrives, profits soar and success, both personal and corporate, is assured.

Do not take my word for it, look at studies over the last forty years that show employee-owned companies outperform in all these metrics those that are not employee-owned. But why does this occur? Simple common-sense dictates that when employees each own a piece of the pie work becomes more rewarding to all those involved. And the pie gets bigger. And employees get happier.

When employees trust in the company and believe in the company’s goals, and when the company establishes a team approach involving all levels of staff, including ownership and managers, a culture of Ownership is created. The most important element in creating a successful culture of Ownership is TRUST. What is the meaning of trust in the context of Employee Ownership? How is trust developed? Let’s take a look at this acronym TRUST: Training, Relationships, Understanding, Sharing and Transparency.

The T stands for Training, in financial literacy.

A general standard in business is that 20 percent of a business’ workforce are high achievers, 60 percent are medium achievers and 20 percent are low achievers, of whom some employees may be actually actively hostile to the company and its initiatives. A successful Employee Ownership program starts with moving the medium achievers to the category of high achievers. Even a slight movement in the right direction will increase productivity and profitability for the business. This can be accomplished by training employees in financial literacy, the single most powerful tool that management has to create trust between itself and employees. Methods exist to improve financial literacy. Ownership Thinking is one of those programs.

The R stands for Relationships.

A strong culture is created by strong relationships, especially within an Employee-Owned Company. Co-operation means building relationships both internally between employees as well as externally between employees and the clients, customers and suppliers they work with. Indeed’s Editorial Team has offered “8 Reasons Why It’s Important to Build Workplace Relationships”, prompting these observations. A successful business culture is a product of multiple factors based on open and honest relationships. Strong relationships foster high employee morale. A high-morale environment means positive and happy employees who look forward to coming to work each and every day. It further means that employees enjoy their work and helping other employees achieve growth, both personally and professionally. Good morale means higher collaboration which leads to higher productivity, increased employee retention and attraction, greater innovation, and a healthier work force.

The U stands for Understanding.

Business Understanding refers to the profound knowledge and insight into the core aspects of an organization’s operations, its market, and its customers, according to Alooba.com. Owners spend tens of thousands of dollars creating Mission and Vision statements but unless employees truly care about the company, these statements have little or no impact on the corporate culture. Employee-Owners are motivated to understand the mission and vision because they care about the success of the company. Company success means employee success; therefore, the employee line of sight is aligned with the company line of sight, in common interest. Ownership mentality is a fundamental factor in how employees view their place and function in the corporate hierarchy. The vision and mission statements are now fully understood and supported when there is an employee culture based on employee ownership.

The S stands for Sharing

Business Sharing, the conveying of data, insights, or knowledge to team members, can help them make better decisions, solve problems, and improve their performance. Effective communication and information sharing can lead to increased productivity, higher employee engagement, and better overall business performance.

Why sharing insights, ideas and information increases TRUST in a business organization: The reason is simple. when you share with others you are telling them at a sub-conscious and conscious level that you trust them as a person, as an equal, and then both parties increase trust between themselves. Trust is built over time and must be continually supported in an Employee Ownership culture through constant and consistent communication at all levels within the organization.

The last T stands for TRANSPARENCY.

Speaker Marisa D’amore has discussed how one can cultivate transparency in relationships with others. To cultivate transparency in your relationships, she advises:

  • Practice honesty and vulnerability in your communication.
  • Be willing to admit your mistakes, confess your sins and share your struggles with trusted friends and mentors.
  • Create a safe space for others to do the same, offering grace, support and encouragement.

Why transparency increases trust in a business organization: When you are transparent in a business setting you are telling others in the company that you trust them and more importantly that you respect them. Transparency is more than showing financials, it includes explaining the reasons behind the financial numbers and how the employees can understand and improve them through their own efforts

Trust supports Employee Ownership, and ownership makes for happy employee-owners.

That is the Joy of Employee Ownership.

At ESOP Builders Inc we have worked with over 160 companies across Canada designing successful Employee Ownership Plans over the last 26 years. An ESOP can have one of many forms such as share purchase plan or employee ownership trusts. Properly designed ESOPs (Employee Ownership Share Plans) come from our process that builds successful ESOPs, based on the principle of TRUST.

Now in Canada the Federal Government has added a new corporate structure, the EOT (Employee Ownership Trust), offering a new model with a substantial tax incentive to create an Employee-Owned Company where the other models may not fit. Answer 3 questions to find out if an EOT might be for you.

Like any program the EOT has plusses and minuses. It is a government program, so your company must meet several key criteria to be eligible for the $10 million capital gain tax exemption.

To find out more about employee ownership, ESOP and EOT at your company, please check us out @ESOPBuilders.com, where we even offer a free confidential feasibility review once you complete a short survey.