Bret Keisling discusses the importance of educating family members of employee owners about ESOPs and suggests having a separate annual event for this purpose. He emphasizes the benefits of family education in reinforcing job satisfaction, improving retention, and reducing turnover, all of which tend to improve profitability. Additionally, he highlights the value of including ESOP account information in conversations about salary and benefit packages to demonstrate the financial advantages of employee ownership over comparable jobs at non-employee-owned companies.
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Mini-cast 255 Transcript
[00:00:00] [Intro music.]
[00:00:08] Bret Keisling: Welcome to the ESOP Mini-cast. Thank you so much for listening. My name is Bret Keisling, and as it says on my business cards, I'm a passionate advocate for employee ownership. This past Tuesday, on Episode 269 of our primary EO/ESOP podcast, I shared suggestions on the best ways to host an ESOP Statement Annual Meeting, including some things to avoid. We got some great feedback from that episode. and a wonderful question about family members. So, today I want to talk briefly about bringing ESOP education to family members.
[00:00:41] I've presented at or presided over numerous annual statement meetings, as well as many ESOP kickoff meetings, when the company first transitions to employee ownership. We know that it's very rare when someone understands employee ownership, particularly ESOPs, right off the bat. On our sister podcast, the Owner to Owner podcast, which I produce, host Jesse Tyler frequently asks his guests how long it takes for people to really understand employee ownership. The minimum answers range from six months to a year, and the general consensus is that it takes at least three years, sometimes up to five years, to really understand employee ownership.
[00:01:20] I've often thought about the employee owner who doesn't really understand all of the concepts, particularly of being an ESOP, and then they go home and they're asked by their spouse or significant other or partner, what's up with this ESOP?
[00:01:33] Clearly, if they don't really get it, they're not going to be able to explain it to their partner. So, I encourage employee-owned businesses I work with to consider having an additional annual event designed specifically for the employee owner and their spouse, significant other, or partner. This could be separate, but in conjunction with the ESOP Statement Annual Meeting, or perhaps during the December holidays. Back when I was an ESOP CEO, we held a barbecue every summer that would have been a perfect opportunity to share the information with families. At this family event, which should include a meal or at least refreshments, etc., I suggest having the CEO do a modified state of the company presentation, and I think it would be great if the trustee and third-party administrator were there to do miniature presentations and to take questions from the floor.
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[00:02:20] I suggest that the family events be modified and shortened from the annual meetings that I talked about in Episode 269, simply because there's more likely to be information that's very appropriate to share with employee owners, like company financials, that I'm personally not comfortable sharing in detail with non-employees. So, you can strip away confidential or proprietary information and still do a great job of educating the family members about the benefits of employee ownership.
[00:02:47] Why do I think family education is important? Because if there's a greater understanding of the tremendous benefits of employee ownership at home, it will do a lot to reinforce job satisfaction, which will help improve retention and reduce turnover. I strongly believe that some effort to educate family members will make the company stronger and more profitable.
[00:03:07] It's also a great opportunity to reinforce a very important concept. Oftentimes, employee-owned companies don't do a good enough job incorporating the value of the ESOP into conversations about salary and benefit packages. Understandably, emphasis is put on salary and benefits such as insurance and paid time off, etc. Including ESOP account information shows how EO jobs are generally more lucrative than the same positions at non-employee-owned companies, which as I said can go a long way to reducing turnover and improving employee retention rates, which adds to profitability.
[00:03:42] If you'd like to talk about how I can help your employee-owned company reach the next level, check out the show notes for this episode. We'll include a link to my calendar where you can schedule a free, no obligation conversation. I'd love to chat and see how I can help you.
[00:03:56] With that, we'll wrap up today's episode of the Mini-cast. Thank you so much for listening. This is Bret Keisling. Be well.
[00:04:04] Bitsy McCann: We'd love to hear from you! You can find us on Facebook at EO Podcast Network and on Twitter [X] @EsOpPodcast. This podcast has been produced by Bret Keisling for the EO Podcast Network. Original music composed by Max Keisling. Branding and marketing by BitsyPlus Design. And I'm Bitsy McCann.
Standard Disclaimer: The views expressed herein are my own and don't represent those of my own firms or the organizations to which I belong. Nothing in the podcast should be construed as guidance or advice of any kind in any field and the fact that I mentioned an organizational website or an advocate or a company on a podcast does not reflect an endorsement, but if you've heard your name or your group's name mentioned on this podcast, I'd love to have you come on and talk about it yourself.
A note on the transcript: This transcript was produced by Descript, an automated transcription service. While it has been reviewed by The EsOp Podcast, we cannot guarantee the accuracy of the transcription. Please refer to the original audio when citing sources.