Join the SBDC for our Celebrated Speaker Series Luncheon at the Huntsville/Madison County Chamber to learn about the “how-to” and benefits of Employee-Owned Companies. The concentration of employee-owned companies in Huntsville is particularly high relative to other regions, driven by the local economy's focus on defense, aerospace, and engineering services. This trend is reflective of a broader national interest in employee ownership as a business model, providing benefits such as increased job security, better financial outcomes for employees, and improved company performance. Nationally, approximately 6,600 companies are ESOP-owned, employing around 14 million people. Huntsville's strong concentration of employee-owned companies, especially in the defense and engineering sectors, reflects a significant adoption of the ESOP model. This model not only aligns with the city's high-tech and defense-oriented economy but also offers financial benefits and stability for the employees and the community.
Learn from 3 local leaders about how they built employee-owned businesses to increase profitability, productivity, and employee wealth accumulation.
Direct from those who have done it!
- Cindy Griner, AMS Co-founder, former Sr. VP at Dynetics
- Bill Roark, Co-Founder of Torch Technologies, CEO and author of Built with Purpose
- Brent Romine, Nou Systems, President
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The concentration of employee-owned companies in Huntsville is particularly high, driven by the local economy's focus on defense, aerospace, and engineering services. This trend is reflective of a broader national interest in employee ownership as a business model, providing benefits such as increased job security, better financial outcomes for employees, and improved company performance. Nationally, approximately 6,600 companies are ESOP-owned, employing around 14 million people. Huntsville, which has one of the highest number of ESOPs per capita of any city in the country, reflects a significant adoption of the ESOP model. This model not only aligns with the city's high-tech and defense-oriented economy but also offers financial benefits and stability for the employees and the community.
Employee-owned businesses have shown considerable quantitative financial benefits, including increased profitability, productivity, and employee wealth accumulation. This is why Huntsville leads the National Trend in this business model!!! Should you consider it for your business?
1. Higher Productivity and Profitability: Research indicates that employee-owned companies often outperform traditional businesses in terms of productivity
and profitability. Employee owners tend to be more engaged and motivated, as they have a direct stake in the company's success. For instance, a Rutgers study found that ESOPs on average improve both company performance and employee benefits simultaneously.
2. Wealth Accumulation for Employees: Employees in ownership programs like Employee Stock Ownership Plans (ESOPs) often experience significant financial gains. For example, median household net wealth is 92% higher for employee-owners than for non-employee-owners. Additionally, employees in ESOPs generally have 33% higher median income from wages (Harvard Business School).
3. Increased Job Stability: Employee-owned companies provide greater job security. The median tenure with the current employer for employee-owners is
notably higher, indicating a more stable work environment and less turnover. This stability is beneficial not only for employees but also contributes to the company’s operational consistency and knowledge retention.
4. Tax Benefits and Increased Capital: The structure of employee ownership can offer significant tax advantages for the company and employees, often leading to increased cash flow. This extra capital can be reinvested in the business, supporting growth and innovation.
The Alabama Center for Employee Ownership serves as the central hub for information and resources around employee ownership in Alabama. The ALCEO's mission is to educate business owners and their advisors (lawyers, bankers, accountants, and wealth advisors) on the benefits of employee ownership via Employee Stock Ownership Plans (ESOPs), worker cooperatives, and Employee Ownership Trusts (EOTs). ALCEO provides resources, case studies and articles, and a list of service providers who can assist with employee ownership transitions. ALCEO serves the entire state of Alabama.
