Selling to an ESOP Provides Big Perk to Motivate Employees

Efforts to engage and inspire employees with gimmicky perks will result in very little if you get the company culture wrong.  Your Perks Aren’t Motivating Your Employees shares some examples of how management plans of kindness and good intentions often turn into perks to nowhere and lost capital.

4 Steps to Implement a Mentoring Process

It takes a concerted effort – in time, energy, and resources – to keep good employees. One method that gets results is to establish a mentorship program. It might not be easy because you’ll need buy-in at all levels of your company, but it’ll be well worth the effort. With the potential for five generations in your workforce, a program that matches new employees with company veterans can pay huge long-term dividends.

Selling to an ESOP Improves Corporate Performance

We recently discussed how selling to an ESOP provides greater employment stability and increases job satisfaction.  It is important to note that job satisfaction is not significantly impacted by employee ownership alone. Job satisfaction and employee engagement are driven by having a meaningful ownership stake AND active participation in the decision making process. The NCEO's Research on Employee Ownership and Corporate Performance reiterates the formula of OWNERSHIP + PARTICIPATIVE MANAGEMENT = OWNERSHIP CULTURE

Selling to an ESOP Provides Employment Stability & Increases Job Satisfaction

We have been discussing the benefits of selling to an ESOP.  A review of existing research on ESOPs found that ESOP companies have greater employment stability. The studies found that the average employee tenure was "significantly longer" than their non-ESOP counterparts and that firms were more likely to adjust wages than the number of employees. It also found a mild increase in "job satisfaction, organizational commitment, identification, motivation, and workplace participation.” 

Selling to an ESOP Rewards Loyal Employees & Preserves Company Legacy

The article Legislation would encourage creation of more ESOP companies shares commentary from Van Meter and CarePro, two prominent Iowa ESOP companies, on Iowa House File 2085 – Iowa’s ESOP Initiative to promote selling to an ESOP. The article discusses the need for establishing incentives to sell to an ESOP and how selling to an ESOP rewards loyal employees and preserves the company legacy and provides a business owner with liquidity and diversification.

Selling to an ESOP Increases Cash Flow by Eliminating Income Taxes

S Corporation ESOP companies are not subject to income taxation (federal and most states), increasing cash flow and providing the company with a competitive advantage. Let me say that first part again. S Corporation ESOP companies are not subject to income taxation!

Selling to an ESOP Saves Local Jobs and Strengthens the Local Community

Every small business owner will face a time when they will need to sell their company. When a small business is put up for sale to a third party, particularly in rural areas, local jobs and the other benefits are at risk. Since an acquiring business may not have any ties to the local community, they could liquidate the assets of the company or relocate the company operations to a different location. This obviously has negative consequences for the employees and the community. 

How to Manage a Multi-Generational Workforce – Part 5: Generation Z

In the previous posts, we have looked at the general characteristics of Traditionalists, Baby Boomers, Gen X, and Millennials. In this post, we will look at the emerging workforce of Generation Z and what we might expect for tomorrow’s work environment and culture. Aligning the mix of perspectives from each generation takes effort. Be aware not to completely categorize your employees by the generation they were born in. For example, there’s a term called “cuspers” for people born within a few years of the beginning of a new generation. Cuspers may have a blend of characteristics from two generations. Remember that each employee should have their own personal needs met in the workplace to achieve the business goals. 

Selling to an ESOP Enables a Business Owner to Defer/Avoid Taxation

The capital gain rate is now 20%. In addition, capital gain income will also be subject to an additional 3.8% Medicare tax. This rate makes an IRC Section 1042 Tax Deferred Sale of Stock to an ESOP more attractive than when capital gains were lower.

How to Manage a Multi-Generational Workforce – Part 4: Millennials

For business leaders and human resources partners, this is a unique time – the merger of potentially five generations in the American workforce. Being able to get the most out of the workers of each generation and being able to get the most out of them working together very well may be the difference in a business’ success or failure. The differences in these generations’ formative years – their family structures, the economics of the time, and, particularly, the massive advances in technology – have shaped their views on work, life, and the balance between the two.

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