Take a fresh look at your lifestyle.

Pandemic in the Workplace: Employee Owned Companies Are Superior at Retaining Jobs and Pay, Protecting Employee Health, Study Shows

In the midst of the pandemic, companies that are owned by their employees are dramatically outperforming other firms in such key areas as securing employees’ jobs, and maintaining work hours, salary, and workplace health and safety. Those are the findings of a new study conducted by Rutgers University and SSRS, and funded by the Employee Ownership Foundation.

HR Technology News: Pulley Closes $10 Million Series A Led By Stripe

Some of the study’s key findings show that, compared to other businesses, employee owned firms were:

  • 3-4 times more likely to retain non-manager and manager employees.
  • 3.2 times more likely to retain staff—even when other businesses received funding through the Paycheck Protection Program and the employee owned firms did not.
  • Significantly less likely to reduce employees’ hours or pay.
  • More likely to send employees home to work during the pandemic—and did so earlier.
  • More likely to provide employees with personal protective equipment, such as gloves and masks.

From an economic perspective, employee owned businesses “kept considerably more money in employees’ hands—and in the economy” than other firms, the study finds.

“This study confirms that employee ownership is an outstanding business model that works to assure the continued success and safety of both employees and the business,” said Cindy Turcot, Chair of the Employee Ownership Foundation’s Board of Trustees. “This research expands the growing body of knowledge showing that employee owned businesses excel at surviving the most difficult economic conditions, while also excelling at retaining and training employees. With the right business model, this study shows, company survival and employee retention are not mutually exclusive.”

HR Technology News: C.H.A.N.T.™ Training Helps Companies Struck By COVID-19 Outbreaks Reopen Safely

One of the study’s most exciting findings relates to the relative effects of the PPP and employee ownership on retention. The fact that employee owned businesses retained employees at a higher rate—even when other businesses had the benefit of PPP funding and the employee owned firms did not—is particularly striking.

“From a policy perspective, this study shows that the employee ownership model far surpasses emergency measures like the Paycheck Protection Program as a means of ensuring job stability and retention during crises as well as normal times,” said Jim Bonham, President and CEO of The ESOP Association. “Those findings do not diminish the value of the PPP, which served its purpose as a short-term emergency measure. But as we recover from COVID and this economic crisis and examine what policies to adopt to make future episodes less painful for our nation, the role of broad-based employee ownership clearly must part of that equation.

“Employee ownership is built on the notion that capitalism is ideal when income producing assets are widely owned; that businesses and employees work best when they work together, sharing the risks and rewards of ownership,” said Bonham. “When this happens, employees work collaboratively and proactively, finding new ways to improve business efficiency and outcomes. Employees are then recognized as creators of solutions to difficult problems—not expenses to be slashed when revenue declines. The result—as this and other studies have shown—is that when economic challenges arise, employees are more likely to keep their jobs and businesses are more likely to survive. Increasing the number of employee owned companies ensures greater business and job security for our nation—which makes good sense and good policy.”

HR Technology News: Healthcare Workers Expect To Delay Retirement Due To COVID-19 Pandemic, TIAA Institute Study Reveals

Write in to psen@itechseries.com to learn more about our exclusive editorial packages and programs.