News > Building Careers, Creating Owners: The Power of Employee Stock Ownership Programs
Leveraging an Employee Stock Ownership Program (ESOP) can significantly elevate a company’s appeal. In today’s job market, people want and search for more than just competitive salaries and benefits. ESOPs offer team members a vested, long-term interest in the company’s success, fostering a culture of ownership, integrity, and engagement.
According to the Employee Stock Ownership Program Association, employee-owned firms are dramatically better than conventionally owned companies at retaining team members – try 235% better.
In March 2024, Nexus Engineering Group, a full-service, independent engineering, procurement, and construction management firm, announced the establishment of an ESOP. The program aims to provide the team with active participation within the benefits of company ownership.
The advantages of an ESOP can be understood through three key areas — how it can help attract, retain, and reward high-caliber talent. Ali Wilson, Recruiter at Nexus Engineering Group, shares her insights on how companies can leverage the benefits of an ESOP to build a stronger, more fulfilled workforce.
Offering an ESOP positions an employer as one that provides more than just a paycheck, it gives prospective employees a tangible stake in the company’s growth. For candidates looking to advance their careers, the opportunity for ownership is a compelling reason to join a team.
That value of attraction has proven strong for the Cleveland-based firm. Nexus opened its newest location in Oak Brook, Illinois, at the end of 2023 and maintained the #7 position on the Crain’s Cleveland Business 2024 list of largest engineering firms in Northeast Ohio.
“The ESOP has been a powerful means for continuing to grow Nexus. It encourages collaboration and engagement because team members see the results of their contributions and feel connected to the firm’s long-term vision,” says Wilson.
Attracting talent is only one part of the equation. Keeping your team engaged is equally important. ESOPs play a crucial role in retention by fostering dedication to the company’s success.
“The retention benefits of an ESOP are significant. Team members are more likely to continue their career with Nexus, knowing their shares grow as the business succeeds,” Wilson notes. “In a competitive market, the combination of immediate income and opportunity of extended wealth building is highly attractive.”
As highlighted by the General Social Survey, one of the most trusted sources for sociological and attitudinal trends in the U.S., employees of employee-owned businesses are 6.2 times less likely to experience layoffs than their counterparts at traditionally owned companies. When employees have an ownership interest, their personal goals better align with the company’s success, strengthening commitment and ultimately increasing retention.
ESOPs offer long-term financial rewards that enhance personnel’s wealth as the company grows. This direct financial return makes ESOPs an appealing benefit, beyond a standard salary.
Even before adding its ESOP program, Nexus had thoughtfully rewarded its team through an exceptional total compensation package compared to competing firms in Northeast Ohio. In addition to its 2024 Top Workplaces Award by the Cleveland Plain Dealer and Cleveland.com, Nexus earned a Cultural Excellence award in the category of compensations and benefits.
“Nexus is proud to offer a unique benefit that rewards team members for their loyalty and hard work,” says Wilson. “The success of the firm directly benefits its employee-owners.”
Today’s prospective talent pool is seeking financial stability, purpose, and ownership. The establishment of an ESOP works to set a company apart with its alignment of interests that benefits both the employer and the team.