Employee-owned companies showing ‘disproportionate excellence’
Ownership culture drives employee dedication, contribution
Tuesday February 2, 2010 -- Jennifer Higgs
Employee-owned companies are showing their disproportionate excellence through winning awards and gaining more recognition than comparable organizations, says Jon Crystal, executive director of the Vermont Employee Ownership Center.

He points to the annual Wall Street Journal and Winning Workplaces’ Top Small Workplaces competition as an example, which has a higher number of employee-owned winners than would be statistically expected.

In 2009, five of the 15 Top Small Workplaces winners were employee-owned companies, three of which have an Employee Stock Ownership Plan (ESOP).

Over the last three years 15 out of 45 — or 33 per cent — of the Top Small Workplace award winners were employee owned, according to the National Center for Employee Ownership website.

In Vermont, several employee-owned companies have been recognized with awards.

The Vermont Chamber of Commerce and Vermont Business Magazine’s Best Places to Work in Vermont award has included several employee-owned companies, with two employee-owned companies among the 15 winners of the 2010 awards.

Two employee-owned companies have won the Deane C. Davis Outstanding Business Award and several have been finalists in the past five years.

The reasons for this disproportionate excellence is found both in research and speculation, says Crystal.

He says when employee ownership is done well — going beyond installing an ESOP to treating employees like owners and developing a culture with the right levels of participation and information sharing — employees seem to have a different level of dedication and contribution to the business.

“I think the business doesn’t have to necessarily worry about the same kinds of pressures of outside shareholders that some businesses have to worry about, so there’s the ability to really focus on success (and) because employees share in that success, we believe that they contribute differently to it,” he says.

Studies have shown employee-owned companies tend to grow faster and are more profitable with higher productivity than non-employee-owned companies, he adds.

In the United States, ESOPs that are S Corporations have considerable savings on federal taxes, which may help the company’s bottom line and investment in growth, notes Crystal.

The Vermont Employee Ownership Center is a non-profit organization that aims to promote and foster employee ownership to broaden capital ownership, deepen employee participation, retain jobs, increase living standards for working families and stabilize communities.

To learn more, visit www.veoc.org.

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