Employee-owned companies are powerful systems that have been proven to improve business performance and company culture. By encouraging employee stakes employees place greater emphasis on their roles within the business, and this shift often encourages corporate benefits like added growth each year. Research has indicated that a 6-11% growth was possible compared to previous performance indicator predictions.
You also have a secure way to motivate and applaud employee efforts. With financial stakes in the company, the employee is constantly rewarded for their hard work and continues to put in their best work for their own financial benefit as well as the company’s overall growth. Improved collaboration and communication can also transpire with management and employees on a more equal scale, benefiting work outcomes.
Companies benefit from this understanding when everyone at the company has a clear purpose and direction. Effort and motivation are more easily maintained when individual factors play a role in the continual encouragement of company growth and work performance. For more information on the benefits of employee ownership, continue reading.
Less Likely To Go Out Of Business With Employee Ownership
According to academic research, companies that dish out at least 30% of shares to a broad range of employees lead to more productive outcomes and are less likely to go out of business than their counterparts. It’s a safe assumption that employees with more financial reason to work hard will work harder. Other noted benefits that branch off of these findings include increased productivity, greater annual earnings, and steady business growth.
Potentially Addresses Wealth Inequality
Business ownership is a highly concentrated wealth form. Since so many people are kept out of the ownership, it’s a given that wealth inequality is an added consequence. With employee ownership, however, plans that integrate a 30% ownership via employee stock ownerships may increase wealth in all wealth quintiles under 90%. Wealth would skyrocket with improved outcomes like a median wealth of $106,000 (up from $24,000) across Black households in the U.S. Likewise, the bottom 50% of Americans would see a rise by more than twice in wealth share- and that’s only if just 10% of each company catered to employee ownership.
Acting Like Owners Reaps Rewards For Business
Companies that have adopted an employee ownership model understand that when employees have reason to think like owners, they act accordingly. The company benefits from significant performance advantages that lead to better outcomes.
Lastly, when employee ownership involves financial stakes, companies have more drive to reach their company-wide goals. Employees are less likely to think individually and more likely to consider what is best for the company regarding how they interpret work tasks and objectives. With these frameworks in mind, the individual and the business benefit collectively, so that everyone wins out.
Advantages All Around
It is evident that employee ownership has advantages for the company and the individual. Closing wealth gaps and working toward financial incentives are at the forefront of these company-led systems, and many benefits can come from these implementations.