If your company is employee-owned, your ESOP should be more than a footnote in your benefits brochure. It’s one of the most powerful tools you have to drive engagement, performance, and long-term retention — if you know how to position it.
That’s where Human Resources plays a crucial role.
At ESOP Partners, we work with employee-owned companies across every stage of the ESOP lifecycle. We’ve seen, again and again, that the companies getting the most out of their ESOP are the ones treating it like the strategic advantage it is.
In this post, we’ll explore how HR leaders can elevate the ESOP in their total rewards strategy and use it to differentiate the employee experience from recruitment through retirement.
Start with the Why: Framing the ESOP as a Long-Term Wealth Driver
While a 401(k) is familiar, an ESOP can be transformative.
Most HR leaders are comfortable explaining a 401(k). It’s voluntary, often comes with a match, and grows with market-based investments.
An ESOP, on the other hand:
- Requires no employee contribution
- Offers tax-advantaged equity in the company
- Provides average benefit levels often up to 10% or more of the employee’s salary
- Has been shown to generate 2.2 times more retirement savings than non-ESOP companies, according to the NCEO
When you explain the ESOP, start with what matters to employees: long-term value, no out-of-pocket cost, and shared success.
Don’t position the ESOP as a 401(k) replacement. Show how the plans complement each other to create a stronger total retirement benefit — especially in job offers, onboarding, and total rewards conversations.
Make Ownership Real: Build a Culture That Connects People to Performance
An ESOP is a qualified retirement plan, but employee ownership is more than that. It’s a philosophy of shared success — and it takes work to keep that philosophy alive.
When employees understand how their day-to-day efforts affect the company’s performance — and by extension, their ESOP accounts — they learn to think and act like owners. That leads to:
- Better peer accountability
- Smarter decision-making
- Higher engagement and retention
But here’s the truth: culture doesn’t grow on autopilot. It takes structured education, leadership alignment, and ongoing communication.
That’s why many of our clients are choosing ESOP CareTM, our long-term service that helps HR teams deliver tailored education, communicate key messages throughout the year, and keep the “why” behind employee ownership front and center.
“You don’t create alignment with one meeting. It takes time, clarity, and repeated messaging, at all levels of the company.”
— Eric Strebe, Director of ESOP Consulting
Tie ESOP updates to your financial performance. Talk about the stock price in team meetings. Celebrate employee and ESOP milestones. Make ownership a living part of your culture.
Don’t Bury the Lead: Use the ESOP to Strengthen Recruitment & Retention
In a competitive talent market, it’s not enough to say you're employee-owned. You have to show why it matters, and why your ESOP is a compelling reason to join…and to stay.
According to research from the NCEO and Rutgers University, employee-owned companies experience lower turnover, greater job satisfaction, and higher long-term wealth outcomes for employees. But job seekers won’t connect those dots unless you help them.
Recruitment best practices:
- Include “Employee Ownership” in your list of top benefits
- Link to a landing page or PDF that explains your ESOP in plain terms
- Add a one-sheet to your offer letter packet or onboarding materials
Retention best practices:
- Reinforce the value of the ESOP regularly, not just during statement season
- Make sure managers and supervisors understand the plan and can speak to it
- Remind employees of their benefit level, especially when competitors offer short-term perks
Protect the Message: Equip Managers to Speak the Same Language
One of the most overlooked risks to ESOP success? Silence.
Managers don’t need to be ESOP experts, but they do need to understand the basics, know where to send questions, and help reinforce the message of ownership.
When managers avoid questions, dismiss the value, or misunderstand the plan, it can dilute employee trust. Don’t assume managers know what to say. Build simple, repeatable internal messages people managers can use, especially during performance reviews, onboarding, and team updates.
This is another place where ESOP Care adds real value: it ensures that leadership, HR, and people managers are aligned and equipped to communicate consistently.
Your Plan Needs a Plan: Keep Ownership Alive Across the ESOP Calendar & Lifecycle
An ESOP is a long-term commitment and like any benefit, its impact fades if it’s not maintained. I’ve seen the biggest cultural drop-offs often come after leadership transitions, acquisitions, or early post-transaction years — when the initial energy can fade if no one owns the message anymore.
With a proactive engagement plan, you can avoid those pitfalls.
A good plan includes:
- Regular education (not just ESOP 101, but business and finance basics, too)
- Benefit-level projections to show potential future value
- Strategic communication tied to performance, not just plan compliance
- A clear articulation of your company’s “why” for being employee-owned
Build a year-round messaging calendar, and don’t forget to include employee spouses and your board — they’re part of the ownership ecosystem, too.
When Value Isn’t Understood, People Walk Away From It
Even the most generous benefit can be overlooked if employees don’t understand what they’re getting. And that misunderstanding can lead to costly turnover.
I had a client in a small town with just a few large employers. One employee left the ESOP company to take a job across the street — because that employer offered a 1% higher 401(k) match.
What that employee didn’t realize? They were already receiving the equivalent of a 14% benefit level through their ESOP.
“They traded 14% for 1%, just because no one had helped them see the full picture.”
Stories like that underscore a critical truth: if you don’t clearly communicate the value of the ESOP, employees may underestimate it — or worse, leave it behind. Your ESOP is one of the most unique and valuable employee benefits your company can offer.
When HR takes the lead in helping employees understand, embrace, and participate in ownership, the ESOP evolves into more than a retirement plan. It becomes a strategic driver of growth, engagement, and long-term success — for your people and your business.
Ready to Build a Stronger Ownership Culture?
Whether you’re just launching your ESOP or looking to strengthen engagement across your organization, long-term success starts with the right strategy.
Download our free guide, Build Your Ownership Culture & Maximize the Business Benefit of Your ESOP, and get practical steps you can take to turn employee ownership into a cultural advantage.
