Do job seekers find employee-owned companies attractive as employers?
Dylan Cooper, Ph.D.
Associate Professor of Management MVS School of Business and Economics, California State University Channel Islands
Jerel Slaughter, Ph.D.
Eller School of Management, The University of Arizona, Eller Professor of Management and Organizations.
Questions: What do US workers expect working at an employee-owned (EO) company is like? Are US workers attracted to EO companies? If so, what explains their attraction to EO companies?
Summary: In surveys, workers express more positive than negative expectations about working for EO companies and find positive statements, such as “Workers are treated well,” more descriptive of EO companies than traditional companies. When reading fictional job postings including a description of the employer’s ownership structure, workers rate an EO company more attractive than a publicly traded company. These results hold for workers with and without a bachelor’s degree. Positive expectations about EO companies are statistically supported as an explanation for their attraction to workers.
US workers have positive expectations about working in EO companies. They expect their work experience would be better in an EO firm and find them more attractive as employers. Evidence indicates it is the positive expectations that make EO firms attractive for potential employees. This is true both for college graduates and workers with less educational attainment.
What do US workers expect that working at an employee-owned company is like?
- We asked two groups of workers and job seekers to describe what they imagine working at an EO company is like and asked a third group to rate the descriptiveness of statements for either an EO or traditional company.
- We asked 193 business school seniors at a public US university, “If you were looking for a job and found one at an employee-owned company, what do you think it would be like to work there?”
- Common themes are presented in the table below. Overall, 50% of the comments were positive, 13% were negative, 12% were mixed, and 25% were neutral.
| Expectations for Working in an Employee-Owned Company |
| High motivation due to financial incentives, pride in work, and engagement. |
| A welcoming, employee-centric, and relaxed culture with less emphasis on profit. |
| Much involvement in decision making with safety to make suggestions. |
| Egalitarian environment with less pay dispersion and fewer status differences. |
| Sense of community and shared purpose. |
| A flat organizational structure that causes disorganization, a lack of leadership, and political strife. |
- A survey of 61 working and job-seeking adults in the US elicited similar comments, although the expectation of a flat organizational structure was missing and expectations related to egalitarianism were more frequent.
- Comments were overwhelmingly positive: 77% were positive, 5% were negative, 15% were mixed, and 3% were neutral.
What do US workers expect that working at an employee-owned company is like?
- We asked 120 working and job-seeking adults in the US to rate how well each of 20 statements describe what it would be like to work in either an “employee owned” or a “consumer products” company. The table below shows the statements.
- Positive statements were rated as 15 to 82% more descriptive of an EO than a consumer products company and the negative statements were rated as 15 to 27% less descriptive of EO companies, except that “No one is in charge” was rated equally descriptive for both types of companies.
| Positive Statements | Negative Statements |
| Workers are treated well. | No one is in charge. |
| People are proud to work at the company. | Things are disorganized. |
| When the company does well, everyone shares the financial benefits. | Wages are lower than at other companies. |
| Employees have control over their daily work. | It takes a long time to make decisions. |
| The company’s strategy is set by the workers. | Workers skip tasks they don't feel like doing. |
| Employees feel like they fit in at the company. | The company does not take risks. |
| Teamwork is an important part of the company’s culture. | |
| People care about each other’s success. | |
| Employees feel engaged in their work. | |
| Workers feel safe to make suggestions. | |
| Employees work hard for the company. | |
| The company culture is welcoming. | |
| The company culture is relaxed. | |
| There are few status differences between employees. |
Are US workers attracted to employee-owned companies as employers?
- To discover if these expectations translated into greater attraction to EO companies as employers, we created fictional job postings that varied the description of the ownership structure of the hiring company. Aside from ownership structure, the job descriptions were identical.
- In an experiment with 66 working and job seeking adults in the US, half of the participants read a fictional job posting that included a description of the hiring company as EO while the other half read that the company was publicly traded. The descriptions of the ownership structure are presented below.
- Participants who read the job description with the EO company rated the company 15% more attractive than those who read the publicly traded version.
| Description of Employee-Owned Company | Description of Publicly Traded Company |
| Boyer is 100% employee owned, which is rare for a company of this size. We view our employees as the most important stakeholders and partners in our business. We pride ourselves on providing our staff with shares of company stock each pay period at no cost to the employees. | We are a publicly traded company, which is rare for a company of this size. We view our shareholders as critically important stakeholders and partners in our business. We pride ourselves on transparency and error-free and accurate reporting so that investors understand our performance. |
Are US workers attracted to employee-owned companies as employers?
- A second experiment extended the job posting’s description of employee ownership to emphasize financial, decision influence, and organizational culture benefits of EO companies. We compared this to a simple description of employee ownership and a description of a publicly traded company. The descriptions are below. We also varied the hiring company to be either a professional services firm or a boat manufacturing company.
- Participants with a bachelor’s degree or more education read the job posting from the professional services firm and participants without a bachelor’s degree read the job posting from the boat manufacturing company.
- Both the simple and elaborated descriptions of employee ownership were more attractive, 8% and 11% respectively, than the description of public ownership. The attractiveness of the two descriptions of employee ownership were not statistically different from each other. Results were similar for the boat company and the professional services company.
| Publicly traded | Boyer is proud to be a publicly traded company, a designation achieved by only a small percentage of U.S. companies.
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| Employee owned (simple) | Boyer is proud to be 100% employee owned, a designation achieved by only a small percentage of U.S. companies.
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| Employee owned (benefits describe) | Boyer is proud to be 100% employee owned, a designation achieved by only a small percentage of U.S. companies.
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What explains US workers’ attraction to employee-owned companies?
- We conducted an experiment in which participants read fictional job postings and were asked about both their expectations of working at the company and its attraction as an employer.
- 296 US workers read fictional job descriptions and indicated how much they anticipated experiencing organizational pride, fair compensation, organization support, and influence in departmental decision making if they worked for the company. They also rated the company’s attractiveness.
- Participants who read a job description including a statement that the company is EO rated the company as 6% more attractive and anticipated that they would experience more pride (7%), fair compensation (9%), support (9%), and influence (13%). Statistical analysis suggests that the anticipated experiences can fully explain the attraction.
| Description of Employee-Owned Company | Description of Publicly Traded Company |
| Boyer is 100% employee owned. We view our employees as the most important stakeholders and partners in our business. We pride ourselves on providing our staff with shares of company stock each pay period at no cost to the employees. | We are a publicly traded company. We view our shareholders as critically important stakeholders and partners in our business. We pride ourselves on transparency and error-free and accurate reporting so that investors understand our performance. |
Conclusions
- Although they have little exposure to information about employee ownership, college seniors about to enter the workforce and US workers have positive expectations about working in EO companies.
- US workers expect that working in EO companies would be a better experience than working in publicly traded companies along many dimensions such as employee treatment, culture, and inclusion in decision making.
- The expectations are not always accurate for typical EO companies. For example, many college seniors expect very flat organizational structures with democratic decision making.
- Expectations do not always conform to the predictions of economists. For example, shirking is not expected to be a problem.
- Overall, US workers find EO companies more attractive as employers than standard companies and preliminary evidence suggests that the positive expectations are the reason for this attraction.
- EO companies are equally attractive to workers with bachelor degrees and workers with less education.