Businesses in Oregon and across the country are facing historic labor shortages. In a new report, the Oregon Workforce and Talent Development Board called the state's labor market "highly unusual," with 84% of businesses reporting difficulties finding workers.
As businesses try to fill open positions, workers are growing more concerned about the cost of inflation, how to save for retirement, and their overall quality of life. With unemployment at record lows, workers are expecting more out of their employers.
While many employers are finding it tough to recruit and retain employees, one group of businesses is faring much better than the rest: Businesses who offer their employees the opportunity to take an ownership interest in the company.
Employee stock ownership plans — known as ESOPs — are popular among workers because they deliver superior retirement savings and job security, even during times of extreme economic volatility. A new study by the National Center for Employee Ownership that examined businesses in the food industry found that companies with ESOP programs were less likely to lay off employees and were much less likely to reduce contributions to benefit plans. Overall, retention rates for employee owners are almost double that of workers at non-employee-owned firms.
Employee owners are also much more comfortable in retirement, something that is becoming increasingly important as costs for everyday goods rise, and economic volatility impacts long-term investments. Employee owners have twice the average retirement savings, compared to non-employee owners, and a recent study by Ernst & Young found that employee-ownership plans outperformed the S&P 500 by one-third over the past 20 years.
Most ESOP companies also offer their employee owners the option to contribute to a 401(k) retirement plan, meaning that employee owners will have the benefit of at least two sources of retirement income when they retire.
At Bob's Red Mill, we are proud to be 100% employee owned, ensuring the full value of our hard work and success is shared among our employee owners. This creates a strong incentive to make good choices that drive our profitability. On average, employee-owned companies are 14% more profitable than non-employee-owned companies.
The benefits of hiring "owners" — not just employees — leads not only to improved productivity, but also results in reduced employee-owner turnover and higher job growth. In addition, at Bob's Red Mill, attracting and retaining employee owners means stability, continuity and improved morale for our company.
Given the tight labor market and growing concerns among American workers, Congress must be doing more to make this ownership model available to more businesses.
Congress is currently considering legislation that would provide incentives for employee ownership, as well as much-needed technical assistance for those companies that are interested in forming an ESOP.
Like so many American businesses, especially those in the food industry, we have faced enormous challenges over the past several years. Bob's Red Mill could not have made it through these difficult times without our employee owners, and we are proud that we are able to provide them with what they need to feel valued at our company.
When our Founder and President Bob Moore established our employee-ownership program, he said that "setting up an ESOP was just the right thing to do." We certainly agree, and hope more businesses begin offering this effective and popular retirement-savings tool for employees.
Trey Winthrop is CEO of Bob's Red Mill Natural Foods, which is based in Milwaukie.
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