Rising numbers of business owners approaching retirement should consider selling to their employees

(SeaPRwire) –   American workers sense their economic stability is eroding. Despite the stock market reaching repeated record highs, labor’s portion of national income has fallen to a 75-year low. Compounded by a widespread affordability crisis and a corporate rush to adopt artificial intelligence, these worker concerns are justified. The current political divide offers little hope for a consensus on granting workers a genuine share in the nation’s prosperity.

Employee ownership presents a viable solution, grounded in bipartisan values and aimed at distributing economic gains broadly. Over the past half-year, we have interviewed employee-owners nationwide, from small shops to enterprises with thousands of staff, across sectors like manufacturing and home care. The common thread among these companies is their practice of harnessing employee insight and distributing profits, regardless of whether an individual works on the production line or in a corporate office.

Interviewees reported that having an ownership interest cultivates dedication and drive. A machine operator with 37 years at a Vermont manufacturer, approaching retirement, stated: “Working for a boss makes you feel you’re only enriching him.” However, being part of an Employee Stock Ownership Plan (ESOP) company meant, “you understand you’re building wealth for your own future, not just for another person.” Employees depicted environments of common purpose and shared responsibility. All understand: if each person puts in their fair effort and profits rise, the workers are the direct beneficiaries.

Ownership tangibly impacts workers’ lives. They explained how the additional earnings bolster current financial stability and enable a dignified retirement. For younger employees who view retirement as a remote, or even unattainable, goal, an ownership stake unlocks new potential. A young fleet services worker at an ESOP-owned tree service company said plainly: “As a millennial, I doubted I’d ever retire. The ESOP changes that—it allows me to dream about it.”

Employee-owners frequently expressed a familial connection to their workplace. They noted a sense of empowerment at these companies, where communication between management and frontline staff is open. Ongoing enhancement and open-book financial management are standard. “As a worker-owner, you have influence over your work,” remarked a co-owner of a Cincinnati childcare cooperative. “It enables you to make choices, reap rewards from your labor, and have a voice in operations.”

Studies indicate employee-owned businesses have higher survival rates, better employee retention, and fewer layoffs compared to traditional firms. When the pandemic caused a 90% decline in Web Industries’ aerospace division, the company shifted to medical manufacturing, expanding a Massachusetts facility from 50 to 650 workers and dispatching millions of rapid COVID tests. Office staff packaged tests after hours, with family members assisting. Michael Quarrey, a Web vice president, said: “When it’s your company on the line, this is the response. Our employee ownership culture is what rescued the business.” New research further indicates these companies lead in productivity.

Given these benefits, why isn’t employee ownership more common? Financing shortfalls are a primary obstacle to conversion, but lack of awareness is equally significant. Although public support is strong once the concept is explained, it remains largely unknown. Employee ownership is not embedded in standard business support systems or terminology. It is seldom taught in universities, and few advisors, lenders, accountants, or lawyers specialize in it. Despite its potential as a tool for business continuity and growth, it is underutilized.

The landscape is starting to shift. Bipartisan federal bills, like the American Ownership and Resilience Act targeting financing hurdles, are among several new proposals. States including Colorado are enacting laws to facilitate funding, and establishing dedicated centers for promotion and support. Nearly $1 billion in fresh private investment also reflects building interest. Norges Bank Investment Management, the globe’s biggest sovereign wealth fund, recently noted that “employee share ownership can create long-term value for companies, shareholders, employees and society.” Major corporations like Walmart are also increasingly exploring equity options for their workforce.

The moment is critical. With each day of delay, more workers and families lose ground. If individuals feel no ownership in where they devote much of their lives, expecting them to feel invested in America is difficult. The impending retirement of millions of business owners over the next ten years opens a generational opportunity for conversion to employee ownership. This large-scale wealth transfer is a unique chance to reshape economic rules with cross-party backing. Promoting employee ownership is more than sound economics and management—it is a step toward renewing our commitment to an economy and a nation where everyone shares in the success.