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What Are the Benefits of an ESOP?

KellyMitchell ESOP

Imagine sharing in the success of the company you work for and securing your financial future – all while having a blast doing it! Well, we're about to dive into the exciting world of ESOPs, where work becomes play, and ownership is the name of the game. Have you ever heard of an ESOP, or an Employee Stock Ownership Plan? If you have, great! KellyMitchell is a proud ESOP, and we're diving into some of the amazing benefits and multitude of advantages ESOPs provide to organizations and employees. We like to think of an ESOP as an “Epic Stock Ownership Party”; they offer a multitude of advantages to businesses, owners, employees, and communities. Here are our favorite benefits associated with ESOPs which include:

  • Encouraged Engagement

  • Supported Savings

  • Outstanding Ownership

  • Proven Productivity

Encouraged Engagement

Get ready to embrace an ownership mindset! The quick answer to the question ‘What is an ESOP?’ is that it is an employee benefit plan that gives employees part-ownership through shares of stock, per An ESOP can improve engagement and retention rates because it empowers you! Your success is the company's success, and vice versa. When you bring your A-game, you're investing in yourself. An Employee Stock Ownership Plan encourages you and your team members to be more engaged at work because it supports your personal savings!

Supported Savings

ESOPs are a powerful incentive. If a company's stock value increases, the value of your share will increase too! This is a great benefit to motivate teams to innovate and contribute to growth! A lot of ESOPs encourage you to see the stock savings plan as a retirement savings plan. One great catch — there is no money coming out of your paycheck. An ESOP is different from a 401k plan, but according to the ESOP Association, they are considered a type of retirement plan. Your savings from your stock shares accumulate over time and serve as a valuable funding source! ESOPs historically return 200%—300% more than 401ks. And, these savings help you diversify your investment portfolio!

Outstanding Ownership

Another ESOP claim to fame is the smooth transition of ownership. The company moves from defined owners to the employees overall instead of new ownership, so everything stays strong. The smooth and gradual transition keeps the company's protocols, culture, and workflow the same. There is no shock to the system. In research conducted by Suzanne Cromlish, Assistant Professor of Management at St. Xavier University Graham School of Management in Chicago, she found that over “90 percent of ESOP acquisitions succeed! That’s an astounding figure considering she goes on to note that with most standard ownership transfers "about half the deals fail.” An ESOP ensures the continuation of a business with minor changes behind the scenes!

Proven Productivity

ESOPs have a proven track record of increasing productivity in the workplace! In a study conducted by NECO, the results show that ESOP companies saw 2.5% higher productivity and lower turnover. The study proves that productivity increases after the adoption of an ESOP. Proven productivity benefits both the organization and you! The study also notes that ESOPs grew 2% to 3% faster than they expected to. Every company expects an increase in performance over time, but these results make sense. You, as an employee, are holding a piece of the company's success in your hands. When the company you work for is winning, you're winning too!

ESOPs are more than just about stocks and ownership; they're about creating a workplace where success is celebrated, and you're at the heart of it all. From retirement dreams to tax-smart moves, ESOPs are your lead to a career that's as rewarding as it is fun. The benefits vary depending on the transition into an ESOP and how it is managed. KellyMitchell is proud to be an ESOP because we can discover the impact both personally and professionally!


If you are interested in working for an ESOP, you can explore open positions here! When you work with us, you are eligible to participate in the benefits of ESOP!


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