Employee Ownership Month – Where Did it Come From?
Employee Ownership Month started in 1982 as “Employee Ownership Week,” as designated by the National Center for Employee Ownership (NCEO). In its second year of existence, this small organization with a staff of three wanted to encourage companies to celebrate being employee-owned and, hopefully, use the opportunity to get attention from local press, congressional representatives, and local leaders. It seemed too much of a stretch for their young staff to try to get a congressional designation, so they just said, “This is Employee Ownership Week!"
With only a few hundred members, almost no money, and no such thing as the internet or personal computers, the start was pretty basic. Party invitation cards were sent out inviting all NCEO members to celebrate Employee Ownership Week. To emphasize this was to be a celebration, the cards were stuffed with glitter and a list of ideas for how to celebrate.
Aside from the glitter that turned out to be a nuisance and quite a mess, the concept proved to be a good one. A couple of years later NCEO started a poster contest. The ESOP Association embraced the idea and soon Employee Ownership Week became Employee Ownership Month, with companies around the country holding picnics, playing games, giving out prizes, holding special communications events, inviting members of Congress to meet their employees, obtaining resolutions from mayors and governors, sending out press releases, and more. It is now an event most employee ownership companies recognize in some way.
Why Employee Ownership Matters
Nearly 14 million1 Americans are in ESOPs, which hold about $1.6 trillion1 in assets. An ESOP is a qualified retirement plan. Due to their structure, ESOPs inherently allocate resources more evenly than almost any other government incentive for wealth-building. An ESOP gives employees shares of stock in the company they are employed by or, in other words, ownership in the company. This allows employees to share in the rewards if the stock value rises (the company does better), boosting employee engagement. It also means they share in the risk if the company does poorly. ESOPs have been proven to motivate employees, increase productivity, improve employee retention, excel at providing employee training, keep jobs local, contribute to business health and longevity, and more. So, celebrate this month! (Just skip the glitter.)
Ways to Celebrate
Ideas from The ESOP Association: https://esopassociation.org/employee-ownership-month
For NCEO members: Ready, Set, Game: Celebrate EO Month Now & Year-Round
Host an outdoor company picnic with cornhole, badminton, and other social games
BCC and ESOP Companies
BCC Advisers has been providing valuation expertise to employee-owned companies since 1988. We are enthusiastic about ESOPs and perform ESOP valuation work for both transactions and annual plan administration. Put simply, we provide an expert independent opinion of the fair market value of company stock. The Department of Labor requires this to assist ESOP trustees fulfill their fiduciary responsibility. BCC appraisals are technically excellent, fully compliant, and reflect an understanding of your company, your industry, and your market. We know ESOPs!
Sources: National Center for Employee Ownership, October 2020 – Where Did Employee Ownership Month Come From?; www.nceo.org; www.esopassociation.org 1As of 2019, the most recent year for which data is available (https://www.nceo.org/articles/employee-ownership-by-the-numbers)