The U.S. labor market is experiencing one of its most significant periods of adjustment in a generation. According to the Bureau of Labor Statistics (BLS), 4.5 million Americans quit their jobs in November 2021 alone with 10.6 million positions still open as of November 30. At the same time there is growing consensus that broad based employee ownership can be a highly effective tool for addressing inequality and promoting engagement. Companies need every competitive edge available to attract and retain high-quality talent today.

Employee stock ownership plans (ESOPs) offer several advantages to employers attempting to respond to the growing demand for employee ownership while building the engagement and retention needed in a highly competitive labor market. ESOPs provide a compelling, innate competitive advantage—they allow employees to build potentially substantial retirement wealth over time. This benefit can be critical as jobseekers as well as major investors such as California Public Employees’ Retirement System and Washington State Investment Board are expressing a preference for companies that provide ownership opportunities for employees. 

This whitepaper explores how ESOPs can improve the alignment between employees’ economic interests and a company’s growth objectives, provide companies with a significant advantage in recruiting and retention, and address ESG concerns in a tangible way.