SUSTAINABLE DEVELOPMENT
a combined wealth of $1.8 trillion earmarked for their employees, equating to an impressive average of $180,000 for each of the 10 million workers. Furthermore, ESOPs are known for o ering salaries that are 33 per cent higher than the industry average, providing employees with financial stability and empowerment. ESOPs also eliminate gender, race and social class di erences, o ering a path to advancement for low and moderate-income workers. On average, their employees have ten times more wealth before retirement than in conventional companies. Employee share ownership can reduce inequality and open the door to economic progress; if 30 per cent of all US companies were employee-owned, 50 per cent of workers with lower incomes would have six times more wealth. These firms are not only employers, but also cornerstones of local economies, providing stability, investment and growth. Finally, it is worth mentioning those e orts led in Mexico by Iteso, the Jesuit University of Guadalajara, in collaboration with other European and Latin American universities through an initiative focused on employee share ownership. This initiative, co-financed by the European Union’s Adelante 2 triangular cooperation programme, has significantly impacted current professors and students in its MBA curriculum and seeks to promote employee share ownership to contribute to the realisation of the UN SDGs in Mexico. This alliance highlights the importance of collective government actions in Mexico and Peru to achieve sustainable development, as well as the role of employee ownership in generating value in both the business and social arenas. It is clear, then, that promoting shared ownership as a business practice can build a more equitable and sustainable society.
Moreover, the ESOP model can be an e ective strategy for the company to encourage talent retention, improve productivity and increase employee loyalty. This new commitment on behalf of the workers adds to their e orts towards the company’s success, resulting in greater operational e ciency and a more substantial work culture. Tax breaks are also part of the benefits. Several studies, primarily conducted in the US, including research by the National Centre for Employee Ownership (NCEO) and the Institute for the Study of Employee Ownership and Profit Sharing at Rutgers University, reveal that companies implementing these plans witness substantial enhancements. These include a marked reduction in sta turnover and absenteeism. The correlation between stock-based compensation and a company’s financial performance stimulates a positive dynamism in productivity and nurtures a more profound sense of employee commitment. Moreover, share ownership positively impacts the work environment and serves as a mechanism for long-term savings for employees. These plans strengthen individual financial stability and contribute to workers’ professional and personal development when combined with educational programmes. A transformative impact At the heart of prosperous economies lie empowered individuals and – behind them –visionary organisations. Employee share ownership, accompanied by a strong culture of ownership in the workplace, constitutes a competitive advantage for companies in the market: it provides greater stability during recessions and helps attract and retain talented individuals. Furthermore, this participation model can be an e ective policy strategy for achieving social responsibility goals. The results of numerous empirical research studies worldwide are revealing. ESOP companies in the US have demonstrated significantly higher productivity and return on equity compared to other companies, at 24 and 92.3 per cent, respectively. Participatory ESOP companies have also experienced a spectacular growth rate, equivalent, on average, to as much as 3.4 per cent faster than conventional companies. These results are magnified when combined with a culture of ownership; it appears that ESOP companies provide
BIOGRAPHY
financial security and improve overall quality of life. They also demonstrate astonishing stability during crisis periods; during the Great Recession, ESOP companies were three times more successful in loan repayment than comparable organisations. During the Covid-19 pandemic, they experienced a layo rate that was four times lower than conventional companies and outperformed their counterparts in talent retention. Additionally, they presented an impressive employee turnover rate that was 50 per cent lower than that experienced by traditional companies during the calendar year of 2019. In the current scenario, as per reports from the Institute for the Study of Employee Ownership and Profit Sharing issued last year, ESOP companies possess
Gonzalo Hernández Gutiérrez is an academic in the field of social economy, holding a PhD from the University of Mondragon and multiple master’s degrees from institutions in Europe and Mexico. He is a full-time researcher and professor at Iteso, the Jesuit university of Guadalajara in Mexico, where he teaches social economy as part of its MBA programme and leads the Economics Division. He has contributed to various projects, educational initiatives and research endeavours within the realm of social economy. Hernández’s focus areas include employee ownership and purpose-driven businesses, showcasing his dedication to advancing socio-economic understanding and sustainable business practices. His e-book, Employee Ownership in the Americas: A Path to Shared Prosperity , is available to download for free at the Google Play Store
30 | Ambition MAY 2024
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