Effective Relationships with Teams

STEP Empowers Employees Through Employee Stock Ownership

Author

Jacquie V. Foss is a public policy advocate. Jacquie can be reached at jacquiefoss@gmail.com

Hello, my name is Jacquie Foss, and I am the founder of Strategies To Empower People, or "STEP," as we are known. STEP started in 1994 to support people with developmental disabilities throughout northern California who are Deaf and/or Deaf/Blind. Since then, we have expanded to serve anyone with developmental disabilities, but our Deaf and/or Deaf/Blind services remain a vital part of our core. Our entire management team is Deaf, and their support teams all communicate through American Sign Language. This aligns with our Deaf and/or Deaf/Blind services unit has of motto: “By the Deaf, for the Deaf.” STEP provides supported living, independent living, tailored day services, and housing access supports.

STEP’s Journey to Partnership

The beginning of STEP is quite a story. In brief, the previous owner of STEP wanted to shut it down after only two years of service. At that time, it served seven Deaf individuals in the community and had three employees. The previous owner gave me an option. I could either take over or close the program within a few days. I chose to take over the program. I went to the Internal Revenue Service for a tax identification number, where I learned that a non-profit organization could not be started quickly, but I could set up a partnership immediately. This influenced me to made the decision to become a partnership. STEP began its journey as a for-profit.

Then, I heard about Employee Stock Ownership Plans (ESOPs). As I looked at the history of ESOPs and their value to the employees, it became clear that this was the way forward for STEP and the people we support.

I say this as a point to how I eventually chose the path to employee ownership. After 30 years of providing services, STEP was supporting 300 individuals and employing close to 600 people. I was considering my next steps toward retirement and began looking at options, but none aligned with my vision and values. Then, I heard about Employee Stock Ownership Plans (ESOPs). As I looked at the history of ESOPs and their value to the employees, it became clear that this was the way forward for STEP and the people we support. In July 2021, STEP became a 100% Employee-Owned Agency.

STEP and the hundreds of employees who have worked here over the last 32 years built the foundation where we now stand. Our philosophy is Heart Right Always. We believe that every individual has the right to choose how they live their own life, in a home of their own, paved on a path to more inclusion. I could not see a way forward without recognizing STEP’s employees, who share the common goals of diversity, equity, and inclusion. The power of employee ownership affirms their work, dedication, and enthusiasm. As employee-owners, what each employee does every day matters to the people we support, and it matters to me.

An infographic from the National Center for Employee Ownership (NCEO) titled 'Economic Power of ESOPs' highlights the benefits of Employee Stock Ownership Plans (ESOPs). It is divided into two sections: 'Resiliency Through the Pandemic' and 'Wealth Creation.' The first section describes how ESOP-owned companies are more likely to retain staff, experience lower job loss, and grow during challenging times. The second section details the financial advantages of ESOPs, including significant retirement savings and contributions compared to traditional 401(k) plans. Supporting data and statistics are included throughout the infographic, presented with icons and text in a professional layout.

An infographic from the National Center for Employee Ownership (NCEO) titled 'What is an ESOP?' explains Employee Stock Ownership Plans (ESOPs) and their benefits. The infographic is divided into sections, starting with a definition of ESOPs as a method for business owners to sell shares to a trust owned by employees. It describes how ESOPs are typically funded, the allocation of shares to employees, and the regulatory framework governing them. It highlights the positive impact of ESOPs on company culture and employee productivity. The infographic also details the benefits of selling to an ESOP, including financial advantages, flexibility in the sale process, and the rewarding of employees with job security and retirement benefits. The design uses clear text, icons, and a clean layout to convey the information effectively.

How Employee Stock Ownership Plans (ESOPs) Work

How do ESOPs work? Employees who work at least 1080 hours a year earn stock in the company. When the company does well, so do the employee-owners through company earnings. It's that simple but also that powerful. The employee-owner’s future and financial stability matters. Annually there is a valuation done to determine stock value. Then, every employee who meets the criteria gets a stock certificate for the value of their shares. Once they retire or choose other employment, they can stay vested in STEP or sell their stock.

There are over 10,000 ESOPs across the nation. Studies show that employee-owned agencies have increased retention, better employee morale, and commitment to the overall success of the agency. Why? Because they are employee-owners!

I could not imagine making a different choice than having STEP become an ESOP. I was only the founder, but our team is what made this agency the respected service provider that it is today. As we look to the future, I am hopeful we will see more agencies begin to look at employee ownership and recognize the expertise and commitment of their team by having them become employee-owners. That is a change I think is worthwhile.

Resources

Seegert, L. (2024). Could worker cooperatives be a fix for the home care worker shortage? Harvard Public Health.

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