The Impact of Jaynes’ 100% Employee Ownership on Customers
JAYNES IS A PIONEER IN 100% EMPLOYEE OWNERSHIP
Recently, the film “We The Owners: Employees Expanding the American Dream” was re-released. The award-winning documentary focuses on the success of three employee-owned businesses: Namaste Solar, New Belgian Brewing, and DPR Construction. The documentary highlights the benefits of an Employee Stock Ownership Plan (ESOP) to employees and their companies’ customers. ESOPs have been around for a while – Louis Kelso, a political economist, merchant banker, corporate lawyer, and author, invented the concept in the 1950s. However, ESOP adoption did not become more widespread until 1974, when the Employee Retirement Income Security Act (ERISA ) enabled ESOPs to be federally protected as a retirement asset.
An ESOP is an employee benefit that gives vested employees an ownership interest in the company in the form of shares of stock. In effect, employees become shareholders and owners.
Two years after ERISA was passed, in 1976, Jaynes became one of the first companies in the U.S. to implement an ESOP.
Academic research has proven over multiple peer-reviewed studies that companies using ESOPs realize enhanced employee productivity and motivation, increased project efficiency, improved employee retention and recruitment, a more positive corporate culture emphasizing teamwork, mentoring, and training, and even enhanced on-site project safety. Higher profitability and increased client satisfaction, which translates into more cost-effective and predictable project delivery in commercial construction, are hallmarks of ESOP-equipped companies.
A critical look at what’s in it for customers of companies with ESOPs shows that customers of ESOP companies also enjoy added benefits, including higher quality work and better customer service. ESOP firms foster a strong sense of ownership and pride among employees, leading to improved productivity, collaboration, and innovation. Clients benefit from stronger partnerships, fewer errors, typically longer-lasting business relationships, and even increased safety, making ESOP companies highly attractive partners for large-scale and complex projects you find in commercial construction.
RESEARCH ON ESOP BENEFITS FOR CLIENTS
In “Employee Ownership And Firm Performance: A Meta-Analysis,” co-authored by Ernest H. O’Boyle, Pankaj C. Patel, and Erik Gonzalez-Mulé, the researchers reviewed 102 academic studies with data from nearly 57,000 companies and calculated that the financial output of ESOP businesses is 2.4% greater than their non-ESOP peer companies.
Bill Keen, a best-selling financial author, wrote in Forbes that ESOP companies offer expanded benefits not only to their employees but to their customers as well:
“ … employee-owners are typically more committed to the client experience than regular employees are.
Think about it: People often take better care of what they own than what they don’t. It’s like renting a house or a car, rather than owning it. And when what someone owns is their company, they are much more likely, in my experience, to lean in and focus on finding ways they can personally provide a better client experience.
All of this directly translates into a better outcome for the business’s clients.”
ESOPs IN COMMERCIAL CONSTRUCTION
Construction is well represented among the 100 largest companies in the U.S. using ESOPs. High-flying construction firms using ESOPs include HDR, Black & Veatch, Austin Industries, Sundt Construction, McCarthy Holdings, Morton Buildings, J.E. Dunn Construction, Cianbro, Emery Sapp & Sons, Swinerton Builders, Suntec Concrete, Consigli Construction Co., and Rosendin Electric.
Construction firms today struggle with a long-term labor and skills shortage and high employee turnover, which is costly and disruptive to project budgets and timelines. ESOPs have been shown to enhance employee retention by offering workers a long-term stake in the company.
The ownership mentality developed by employee-owners through an ESOP means they feel more invested in the company’s success. This sense of ownership creates a deeper emotional connection, making employees more likely to stay with the company over the long term. At Jaynes, employee tenures often last 20, 30, or even 40 years.
ESOPs also provide retirement security. As the company grows, the value of the ESOP shares increases, creating a financial incentive for employees to remain with a 100% employee-owned company like Jaynes.
ESOPs also help with recruiting, hiring, and training new employees. In the construction industry, where projects depend heavily on experienced workers, experienced project teams translate to higher safety, fewer project disruptions, and more efficient project delivery.
RESEARCH ON ESOP BENEFITS FOR CLIENTS
Researchers have shown that ESOP-enabled companies show increased productivity and profitability. Employees who own a stake in a company are often more engaged, motivated, and aligned with the company’s long-term success. Employees and owners are more likely to focus on efficiency, quality, and client satisfaction, contributing to competitiveness and profitability.
But ESOPs may have an even greater impact on a company’s recruitment success and employee retention. Attracting and retaining talented employees in an extremely tight labor market has been the norm in construction. With skilled workers in high demand, ESOPs help companies attract and retain employees by offering them an ownership stake. This improves employee loyalty and reduces turnover.
STAY TUNED FOR OUR NEXT 100% EMPLOYEE-OWNERSHIP BLOG: THE IMPACT OF JAYNES’ 100% EMPLOYEE OWNERSHIP ON JAYNES’ EMPLOYEES (AND CUSTOMERS)
Our next blog will focus on how ESOPs and employee ownership improve recruitment, retention, company performance, and employee financial wellness.
For more information on some of the commercial projects that 100% employee owned Jaynes has worked on, please visit our projects gallery.
