The US economy added 209,000 jobs in July, dropping the unemployment rate to 4.3%, the lowest level in sixteen years. It’s no secret that it’s getting more difficult to recruit and retain employees. Employee ownership gives you a clear advantage against the competition, but only if you effectively communicate its benefits to current and potential employees.
Here’s three practical ideas you can integrate into your written, electronic, video, and face-to-face communications to gain the employee ownership’s recruitment and retention dividends.
1) It’s unique
ESOPs are a rare and valuable benefit. The National Center for Employee Ownership, a not-for-profit research organization in Oakland, estimates there are only 7,000 ESOP companies in America. The US Small Business Administration (SBA) statistics show about 11 million small companies in America. Less than one percent of small businesses offer this opportunity for employee wealth building.
Do your current employees realize how unique it is to participate in an ESOP? How unlikely another company is to offer the same benefit? The same holds true for people you’re trying to recruit. Unless you educate them about your ESOP, they probably don’t know that it’s an unusual opportunity.
2) It’s provided at no cost
Another unique ESOP feature: it’s usually provided to employees with no out-of-pocket cost. That fact can create unwarranted skepticism because to participate in America’s most well-known retirement plan, a 401k, one must contribute his or her own money. Unless you compare and contrast your ESOP with the typical 401k, most people won’t know how different it is.
According to the Pew Research Center, only 49 percent of private sector workers participate in a company-sponsored retirement benefit. The average ESOP contributes 6-8% of an employee’s annual wages to the plan, compared with 4% to a 401k. You, of course, should use your plan’s numbers to illustrate how employees benefit. Once again, don’t expect people to know the facts: you’ve got to communicate them.
3) It’s about your culture
Most people get a job because they need money. They stay when a job meets both external (money/benefits) and internal rewards. Your ESOP is a great tool to build an ownership culture that rewards people both monetarily and intrinsically. Remember to communicate the internal (intrinsic) rewards of an ESOP in addition to the financial rewards. You can do this by:
a) Sharing how employees are part of something bigger
In an ESOP, unlike a conventional company, everyone is working to build his or her (and everyone else’s) successful future. Shared ownership makes people part of something bigger than themselves.
b) Creating open communication channels and opportunities for involvement
ESOP firms that value employees’ ideas, opinions and input are much more successful serving customers and growing the business than those, both ESOP and conventional, that don’t.
c) Delivering praise, recognition and feedback
It costs nothing to say thank you for a job well done. Some people believe only managers or supervisors can provide positive feedback. That’s not true. In many successful ESOPs, recognizing a co-worker’s contribution is part of “acting like an employee owner.” What is your company doing to build and sustain an environment that fosters an ownership culture?
Effective ESOP communication makes good business sense. Reduced recruiting and employee replacement expenses adds profit straight to the bottom line. If you’re not using your ESOP to attract talent and reduce turnover, you’re squandering a great opportunity to improve business performance, company culture and ESOP stock value.
If you’d like to discuss how Blue Ridge ESOP Associates’ communication services can help you make the most of employee ownership, please contact us today!