If you could create your own fantasy board of directors, who would be on it? CO— connects you with thought leaders from across the business spectrum and asks them to help solve your biggest business challenges. In this edition, we asked an expert about the advantages of an employee-owned business.
This edition of "Ask the Board" features Jennifer Moore, Marketing Director at DaVinci Sign Systems Inc., a full-service sign company in Windsor, Colorado. Moore dives deep into why employee ownership may be worthwhile for your business.
It's no surprise that employees want to feel valued and rewarded for their hard work. That's where employee ownership and employee stock ownership plans, or ESOPs come in. This type of business setup can lead to a number of noteworthy benefits, which are discussed below.
A better company culture
At DaVinci, we already had a strong company culture and many of our employees have worked here for almost their entire careers. However, after we became employee-owned, the culture improved even more. We had a more direct connection between serving customers well and our own well-being as employees.
Greater community involvement
As a company that works with lots of local small businesses, we now are even more connected to the lifeblood of the community. Employee ownership has a positive impact on the communities, as it secures local jobs and allows employees to build equity and invest more in the communities around them.
At DaVinci, we already had a strong company culture and many of our employees have worked here for almost their entire careers. However, after we became employee-owned, the culture improved even more.
Jennifer Moore, Marketing Director, DaVinci Sign Systems Inc.
Lower turnover rates
When you consider the high costs of hiring new employees, it's clear that it's far less expensive to retain the ones you currently have. Fortunately, we've been able to do just that through ESOPs. Generally, ESOPs cause individual net worth to go up, so turnover rates are lower.
Fosters workplace fairness
Equity in the workplace is of utmost importance in today's world. By implementing employee ownership, you can ensure that lower-salaried employees have the same benefits as higher-salaried employees and that vesting is applied in a fair manner.
Promotes employee feedback
Employee feedback, which is a key component of an ESOP, boosts retention, enhances morale, improves performance, and increases engagement. If you establish a managing board or directorship that represents employee interests as a whole and make sure that it's made up of a balanced distribution of departments, everyone will feel represented.
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
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