Employee stock ownership plans (ESOPs) can be great for all kinds of industries, depending on how well the market is doing. According to a 2000 study by researchers at Rutgers, companies that take advantage of ESOPs actually grew 2.3% to 2.4% faster once their ESOP was set up than they would’ve otherwise grown without the ESOP.
And over the last decade, a diverse range of companies have started experimenting with these stock ownership plans. According to Blackbird Miltech, companies involved in military technology, food packaging, and ophthalmic automation have all moved toward implementing ESOPs in recent years. This switch will allow current and future employees to own a share of the company and be invested, both financially and personally, in the success of the company — without the cash investment usually required to purchase stock.
These ESOPs can also act as retirement plans, which, depending on how successful a company becomes, could result in large financial gains for its members and a very lucrative retirement.
“ESOP’s done well and for the right reasons, allow business owners both to do well and can be both an altruistic and humanitarian approach to a collective win-win business environment,” said Jim Steiker, CEO and Chairman of SES Advisors. “Employee ownership can add an exclamation point to an already strong business and create an even more engaged culture. Employees potentially have strong financial rewards when they retire in exchange for their hard work and dedication throughout their careers.”
Of course, the potential retirement benefits depend on the success of the company itself. As Morning Consult reports, despite the fact that millions of American workers continue to experience ongoing anxiety about their current and future economic situation, employees taking advantage of ESOPs are much more optimistic.
John Zogby Strategies released a new poll showing that employees with ESOPs were both more financially secure and less anxious than the overall U.S. worker. Along with the immediate financial benefits of ESOPs, these employees are less anxious because they are generally much better equipped to successfully handle unexpected expenses.
As long as employees are working hard, the industry is on the up and up, and management is making financially responsible decisions, employees can remain more optimistic about their future. And in a time of general economic anxiety, the benefits of optimism about the future can be priceless.