Employee Ownership Australia and New Zealand

This year the Annual Conference, “Productivity and engagement: Sharing success through employee ownership” will explore employee ownership in Australia with reference to key international trends (the UK and US).

The focus is on looking at what is happening locally from the perspective of listed and SME companies, with the afternoon training programs on key issues for companies in Australia. Browse the  Conference Program and Register Online today.

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The ESOP Of The Year Awards Night on the same day as the conference, celebrates companies that exhibit employee ownership excellence. Nominate here

New EOA Report – April 2013

Employee share ownership weakened by government legislation, new report finds

Lower participation in employee share plans and a decrease in the use of option plans is hitting innovation in Australian business

Download and read The Changing ESS Landscape since 1 July 2009 |  EOA Report, April 2013

Download and read Media Release

Why Employee Ownership/ESOPs are so important?

The basic proposition is simplicity itself: people work better if they are working for themselves.

In the US where employee ownership is wide spread, one third of the Wall Street Winning Workplaces have Employee Share Ownership Plans (ESOPs) in place.  This suggests employee ownership is a factor that impacts company performance, morale and employee engagement and participations.

What does this translate into?  Most importantly, from a company’s perspective it can bring increased customer and employee attraction rates, talent retention and employee motivation through pride^[1].  But such recognition relies on more than quick fix perks^[2]. ESOPs need to be tied to a company culture that operates through trust, open communication, performance recognition, opportunities for career progression, remuneration and cultural fit.  All of these could be assisted with the introduction of employee share ownership.

Imagine a business where employees were as motivated, passionate and hard-working as the owner or as interested in organisational value and success as stakeholders. In essence, this is what employee ownership programs can deliver.  Based on the premise that one ‘goes the extra mile’ when they’re doing something for themselves, well designed programs increase productivity, performance and investment.  Sales and employment growth show gains of more than 2.4% above predicted expectations, after an ESOP is introduced^[3].

For the enterprising business owner who has toiled for years to grow their business and now dreams of retirement, ESOPs allow for a transitional scale back of day-to-day involvement.  For the employee, where acquisitions or mergers potentially fuel disgruntlement, job insecurity and a desire to ‘jump ship’, ESOPs offer opportunity, recognition and increased participation in core company initiatives.

C-Mac Industries, an Australian based company who recently underwent an employee takeover is a case in point.  With the death of their previous owner in 2008, there was uncertainty regarding future company direction.  A few fearful employees left, before the company implemented an employee buyout scheme.  This proved a successful alternative to selling the company to an external buyer^[4].

Organisations globally recognise these benefits.  In the US, there are an estimated 25 million employees (out of some 120 million in the non-governmental workforce) participating in US ESOPs or employee stock purchase plans^[5].  In the UK, around 21% of public companies have broad-based ESOPs or share ownership plans^[6].  However, Australia seems to have undercapitalised on this opportunity with estimates of only about 6%⁶.

If you want to find out more about how employee ownership or an ESOP can help your organisation, call 0424 557 297, become a member or attend one of our training sessions.

The text above uses an article by Rosalyn Sadler of Mastertek as its core content which sums up our thinking into why ESOPs are so important.