The landscape in today’s job market for hiring companies is difficult, especially with the unemployment rate at 4.1% for the past three months, according to the Bureau of Labor Statistics. Unemployment rates are at the lowest since 2000. Employers continue to need top talent to grow operations. This was evident with December’s jobs report indicating, once again, that we added jobs, another 148,000 to be exact. Companies have added 2.1 million employees in 2017 and 2.2 million employees in 2016, so it doesn’t appear to be slowing down anytime soon.
In the initial start-up phase of your company, your personal and professional goals were aligned. Now, as you consider the next season of life away from your business, you must start researching your options for transitioning your business. In parts one and two of New Year, New Ownership Plan, I reviewed, at a high level, some of the advantages and disadvantages of selling to an ESOP or a private equity firm. In part 3, I will provide some insight on the advantages and disadvantages of selling to a third-party. When transitioning your business, you are faced with one basic question: Do you sell the business to an internal (employees or family members) or external (private equity or third-party) party? It is very important that you research each option and find the one that aligns with your vision for the future.
In part one of New Year, New Ownership Plan, I reviewed, at a high level, the benefits associated with transitioning your business to an Employee Stock Ownership Plan. As I mentioned in the previous blog article, this is not the only option you have as a business owner. Another option could be selling to a private equity firm. I would like to highlight the advantages and disadvantages associated with this option.
An Employee Stock Ownership Plan can be a perfect option for transitioning your business, but it is not the only option. The next series of articles will focus on the different ways a business owner can transition their business. This decision can and should involve a lengthy research process to ensure the best fit for you, the business owner!
Providing proactive education and building awareness is important to help employee owners understand their importance and impact on the ESOP on a daily basis and to maximize their expectations and return through the entire lifecycle of the Plan. The ESOP Trust has saved the company a lot in taxes and has provided each employee owner with a financial stake in the company’s value today and into the future.
Today’s blog article focuses on what information should be shared to ensure you keep employee owners’ attention. My previous blog article, The Secret Ingredient in Employee Ownership, highlighted how to engage employees through creating a sense of value among your employee owners through the following four key emotions: enthusiasm, inspiration, empowerment, and confidence.
October is always an amazing time of the year as the weather changes from the warmth of Summer to the crispy cool temperatures of Fall. These seasonal changes remind me of the transitions we all face no matter the industry we work in. As things change, we can’t forget to look back and remember the past and where everything initially started.
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.