Attract & keep top talent—why employee ownership is the key

All right, welcome to our webinar today. Um, I have the privilege of being able to have a conversation with two great folks here. Um, so my name is David Gray and I'm with Project Equity. As you all know, we are a nonprofit leader in the area of employee ownership. And we're really focused on harnessing employee ownership to help communities to honor selling owners values and their legacy and really address income and wealth inequality. And today we're having a conversation with you both. And I'll let you introduce yourselves in a second because we want to talk about where employee ownership sits as a tool to address retention and acquisition of employees. So Liza, can I have you introduce yourself and tell us a bit about you? Yeah. Hi, I'm Liza Sanchez and I am a recruiter. I am the owner of eight bridges talent partners and I have worked with project equity and with at quite some time um and a variety of other companies and nonprofits um in the recruitment space. So I come at this from a lens of recruitment. So that's great. Brian, how about you? Can you share the uh I'm Brian Kaine. I'm the CEO of Atau Fine Arts Services and uh yeah, we became a co-op in 2021 and with the help of project equity and uh we've also worked with Liza before. So this is a privilege. Thanks. That's wonderful. And we'll get more into the nuances of all these things. um just to kind of set kind of an idea of our framework today. What we're going to do is have a discussion, the three of us, we're going to kind of talk about how we've seen employee ownership impact the topic of the day. And then I'm going to have some space for some questions from the audience. And so if you are joining us today, please go ahead and put your comments in the chat and we'll be able to address those at the end of that. Um, we're looking at a great conversation here for the next 45 minutes or so. And I'd like to start by defining employee ownership first. So employee ownership, as we really kind of think of it, is a broad-based employee ownership. And it's when a company has ownership where at least 30% of the ownership of the business is held by the employees. There's a lot of flexibility on how we structure that. There's some really common approaches like an ESOP, an employee ownership trust, worker co-ops. There's multiple approaches to it and so it's very flexible in how it can address that. But that's kind of the framing that we're using today when we're thinking about broad-based employee ownership. Um, Brian, you had alluded to the fact that you work at a business that is employeeowned. So, I'm wondering if you could kind of just start us off here with talking about how you first encountered employee ownership. Sure. Um, we were founded by Scott Atau somewhere in the 70s, depends on what, we don't know, somewhere in the 70s. Um, when he got to retirement age, he he had always talked about selling the business to his employees. Um, none of us really knew what that meant, including him. And he had researched ESOPS. uh he was pretty financially um adept and he didn't like him um for so many reasons that don't really need to get into but he didn't like them. So we found project equity basically and uh you guys helped us pick a structure that is employeeowned cooperative uh in California and so we were also kind of ran headlong into the pandemic. Um we had gotten a PPP loan so we had to wait because if you change ownership all this kind of nonsense happens. So it it it was kind of from 2018 through 2021 um that it took us to be to actually 2021 in January is when we became a cooperative. Yeah. Right. I appreciate that you kind of landed your story in our history meaning during COVID and I was working during those years with a lot of businesses as I know you were too and those were tough times and you know we'll go through and we might be presently going through some other times and so that are challenging and it's interesting to see that you all were able to convert to employee ownership in a time of upheaval and that it worked for you but I'm wondering if you could before we kind of broaden the conversation can you tell me your own personal journey in terms of concerns you might have had about employee ownership or hopes that you might have had. Uh we have we range between 45 and 50 people employed and I have been here since 1993 and so and that and a lot of people had been here a long time. It was it's it was and still is a good place to work. Um, so I was really concerned what was going to happen when Scott retired and the range was from he was actually never going to retire or let us run the place to he was just going to leave. And we really didn't understand um what was going to happen at all. And I had plan B. I talked to some other employees. you trying to figure out if a a group of us could buy the place, if you know, if this cooperative thing didn't work out. Um, right. I'm fortunate and lucky to say we never had to even do that. Not even sure if it could have, but you know, it it worked out. And it was really just somebody doing it like a Google search that found you guys. That that is literally it. and and bringing in Hillary at the time and Hillary came in and and we were all like, "Oh, this is this is great. At least we're going to find out if we can actually do this." Um, and then it it dawns on you pretty quickly that you can't you can't fix a broken company by becoming a co-op. Like, you have to be running a well-run company. And we didn't have uh so concurrently we hired a management consultant because we didn't really have much management. We had an owner and he managed everybody. Uh, so those two things really helped us kind of get through a difficult time, but also come out as a employeeowned cooperative with I think we had almost 30 uh founding members. Wow, that's exciting. And I love how you alluded to management. I you know I've been working in this field for years and one of the first questions I always hear is well yeah I think employee ownership's great for some businesses but we need strong leadership in our industry and I'm always like yes of course you do and one of the big kind of misconceptions I feel is out there with regard to employee ownership is that you don't have strong leadership and so one yeah I see you Brian you're like no yeah yes it is Right. One of the things that I often say to business owners is I say like you have figured out a business model. You figured out how to run a really efficient machine. We don't want to change it if we move it towards employee ownership. The goal is to figure out how to continue to keep that leadership, that wisdom, that management structure in place. And that the ownership dynamic around employee ownership comes in as that board of directors at that high level governance piece. It sounds like that's resonating with you. Um, well, yeah, it is. Yeah, please. Personally, you know, it's it's a board, right? The board directs the CEO. Um, the beauty of it is it's a board full of employees. And when it works really well, you know, I don't feel better, you know, fettered or or stopped. I'm I have the same responsibility that I would have if I owned it or if I was talking to investors or or whatever. Um but what I gain from the situation is um a distinct lack of isolation, you know, because a lot of CEOs are they feel very isolated. This is it's a tough job. The buck does have to stop with you. But I feel like I have a real partnership with this board of directors. They've been in the trenches with me. We've been here a long time. I can go to them and say, "I have a problem. What do you think?" Or they can go to me and say, "We have a governance issue. Um, we think it's worth you doing." It's it can work. Um, maybe not as efficiently as if I just owned the place and could do whatever I wanted, but I think it's better. I I really do think it's better. Yeah. Well, that's great. we can get more into it, but Brian, thank you for kind of giving us the touch and feel of employee ownership because that's really what's the framework for the conversation we're going to have here today. And I'd like to open up. We've got a panel survey question that's going to pop up here, I believe. And the question is, this is for all of you that have joined us in our webinar today, but what are some of your top hiring and retention challenges? So, hopefully you'll see that right there. you can go ahead and put your answer in and then later on in our conversation I'm going to refer back to some of these examples that we're getting from you participants and we'll kind of pull those into our conversation. So please feel free to enter those in and we'll be getting back to those later. Liz, I want to pivot to you. You've been doing recruiting for a long time. You've seen probably a couple different waves of anxiety and we had that that postcoid years where it was everybody was scammer was trying to find employees right away. What are the top challenges you see right now with regard to acquisition? Boy, you know, it really depends on the sector and the role. Yeah. Yeah. So there are certain roles that are just harder to fill. Um it also the move towards remote work has become very attractive for employees um with a strong preference. And I feel like a lot of employees don't actually prefer to be remote. They just want the choice. Like they probably a lot of them choose to go to the office and hang out with people but they don't want to have to. So um that's a big piece. Um, you know, I would say with the younger, newer working generation, you know, those who are just graduating from college, graduate school, um, I think they're facing a much more difficult economic climate. So, for example, they have a lot of student debt. the housing market is, you know, nearly impossible to to support themselves in health benefits. Like they have to have a job with health care. There's it it's it's a really tough place for them. And salary is, you know, salary and benefits are really really important to people. And I do hear a lot of sort of disgruntled people saying, "Well, these young people, they're asking for so much you such a high salary." And I'm thinking, well, they probably have a lot of debt, right? And they're trying to support, you know, themselves where if you're older, you might be in a house that you've lived in for a long time or you might own property or you're you went to school at a time that wasn't quite as expensive as it is now, or you don't have debt. So, you know, I do find the younger generation is much more anxious about salary benefits um and even retirement kind of situations, but needing to make sure they're earning well is really important. Um, so that's really helpful. You know, when I reflect on my friends that are kind of in that kind of stage of life, I've also sensed from them that there's a desire to have meaningful connection to the work that they're doing. Is that something you're sensing as well? Oh, absolutely. Yes. Yes. Because I would say that the only reason someone would take a pay cut is because they're really have a strong belief in the work that they're doing or they feel it's important or they're passionate about it or they love it. One of those pieces. If those things aren't in line, um, then they're like, I need the money. Right. Right. Yeah. But but even that it's not really that fulfilling. I do get a lot of people that are leaving sort of your traditional corporate jobs because they're just don't feel fulfilled even though they're like, I'm making a lot of money, but I just don't feel happy um with what I'm doing. Yeah. Ryan, let me let me pull you in as somebody who's running a business. Uh there's two thoughts that come into my head. Give me your two thoughts and then I got a follow-up question. Uh, one I I don't Yeah, I'm of the older crowd. So, I look at the younger people coming in here and yeah, they're asking for a lot of money, but I think to myself, when I was their age, what would I need to get? Where are they going to be in 20 years? Like, they're they're facing stuff that we never had to face. you know, we could just have kids and get health care and get a job and change jobs and do all this stuff and and incrementally things would get better, right? Things would just get better because we weren't nearly as burdened as they are. And so, yeah, you kind of have to wipe your windshields clean of that kind of preconception that they just want the money. They're they're doing what everybody else does. They they have to figure out where they're going to be in 20 years. And uh so my second thought is we work in the arts. So our pay scales aren't high compared to you know we might do well compared to other arts companies. Um but compared to tech companies we're like minuscule right so people aren't coming here to get rich. It's just not going to happen. Um so I really offer them longevity. I and I offer them a culture and a lot of people are looking for a culture and a place that they align with their values. You know, they can come and feel like their values align with the company values and then we're in it together and we'll do the best we can. Let me peel the the onion a bit there. What about being an employee owned business do you feel is maybe attractive to folks that are recognizing they might take a little bit of a pay cut or something like that? So where do you when you're at that final stage you're doing kind of like you found a candidate you really like you're offering them a position and I've been there you know you kind of want to put your best foot forward and you're like you want to highlight the the things that you can bring to them as a employer. How does employee ownership fit into that for you? Well, for us it's it's maybe a little different than some companies. You know, we have a highly specialized business that's really mission centric. You know, you're going to want to be here if you you're from the arts, you want to work with the arts, you believe that the arts and culture is a good thing. You know, um there's nothing wrong with not being missioncentric. like we need bakeries, we need factories, we need all sorts of things and those those are great jobs, but you're going to come here for this kind of purpose. Maybe it aligns with your interests. And so I can offer that whether I'm employee owned or not, right? Um but there's two other parts to this. There's the financial part which is ownership. And ownership is real. It's not it's not some weird corporate promise. You have rights. You have obligations. You're an owner. You share in it's real. It's ownership with all of its all of it. And you have governance in in our particular structure. There's also governance which is agency. So you have some agency in what is going to happen with the company that you own a part of and not just some shareholder that that doesn't have agency and hopes it goes well. Those are three things that I can bring to the table. And it also kind of it it's not a great place to come. Maybe if you want to be here for a couple of years and go somewhere else. I mean maybe it is because if we can give you some good training but in the in the the mix of things we really are looking for people who are going to stay here you know we're going to you know be here for like me like I'm here for 30 some years and now I'm the CEO and nobody ever thought that would happen so I hope that answers your question. Yeah. No, that really does. And and you I'm going to reframe what you just said in the way I usually talk about it. I talk about ownership really as being three key things. There's control, so there's some voice that is owners you're able to exert. So there's control. There's benefit, meaning there's the rewards of ownership. It could be profit sharing. It could be financial in these different ways. And then there's responsibility. And responsibility is really dealing with the risk that comes with ownership. And I sometimes think of a car. You know, my son is 16 and you know, that brings its own stuff, right? And and if he owns a car, right, he owns a car, he's going to have control. He'll decide where to park it, decide if he wants to put new money into a stereo system, right? And then there's the benefit where he can like have that extra freedom where he can take it where he wants. He gets a little bit more like, hey, I can drive, you know, an hour down the road if my parents let me. And then the third is there's that risk the responsibility right if he gets in an accident those types of things there and I think that ownership as I've been working with companies from the beginning stages where I'm working with the owners to think about employee ownership if it's a good fit for them to the transition and then the final kind of we do a postcon conversion support where we walk with the business for two to three years really helping them live into what does it mean to do ownership you know I see these three different things of ownership really show up in different ways. Um, and one of the ones that, and I'm going to get to this in a second, but one of the ones that was a surprise to me was pride and that sense of being able to say, I work somewhere and I'm an owner. And you know, like, have you heard of XYZ place? Well, I'm an owner there. That's where I work. You know, like there's just this added pride. Um, so I'd like to kind of peel into in that conversation a bit, but before we do that, Liz, I'm wondering if you could speak to this question as well. When you were trying to find place, you know, people to fit roles um with Brian's company, have you found employee ownership is attractive to folks? Does it set Oh, definitely. Okay, tell me about that. How does it set it apart? Um well so you know so when I was recruiting at out they now have someone who's doing their own recruiting but um when I was doing it they um were in the process of transitioning so they hadn't fully transitioned yet. This was right during the time when they had the operations um consultant who brought me in actually. So you know we um you know discuss their needs and and so I always say that salary is the number one attractor to a job. Mission obviously is going to be huge. Um the but behind salary it's benefits and particularly um you know the idea of being a part owner kind of lands in the benefit category because in addition to maybe having a retirement account there is this you know hope that this company's going to do really well and then as the company does well you do well as an owner right you are also reaping the rewards of being a part owner So um and I you know in addition to to um at how um I have other people who work where they have a sort of ownership structure. It's more like stock options um and they want to stay because they know they're that's that's going to be valuable for them to keep that and to get vested in that. Um so whatever ownership structure it is there's a sense of commitment and excitement but also it's seen as a benefit like wow um you know so when I was interviewing people it wasn't wildly wildly known that it was employeeowned but then I would discuss that with them that this was a business that was converting to employee ownership and that certainly was like oh wow that's amazing you know people were really excited about that concept So it definitely was attractive in a variety of ways. Um and I think pride is is a lot of that too. I mean certainly there's the the thought that you will you know make money as being an owner. You know if you're an owner you're in it because you want to you know reap the the benefits of the work you're putting in to a company. Um, but in addition, it's that like you're saying like you're you're actually not just a cog in the wheel. You're you're really part of that leadership and and and it's exciting. So, yeah. Yeah. Well, that that reminds me of a story like I often times feel I've got the best job because I get to work with these businesses that they convert and I work with the employee owners as they're kind of recognizing hearing about the op option to become an employee owner and then living into it. But one of the clients I was working with, they were a cabling client and they would put in c like they did construction type stuff and they would put the cables in businesses and one of the employee owners was looking at the specs and they had always and maybe I'm going to get too much into the weeds here. They always had a requirement to leave 2 in of extra wire whenever they did a joint when they were kind of connecting different wire wires. You can tell I'm not an expert in this, right? like my terminology is just really kind of layman's ter terminology. But after they became employee own, this person came to their boss and they said, "You know what? We don't need that extra like inch and a half. Let's cut it down to a half of an inch." And we could do that across the board. It's not going to change like our bidding for the jobs. It's just going to be additional profit that we are going to be able to make. And they were able to bring I think it was an extra like 30k that they were able to save a year. But but right like over the course if you're an employee there and you're able to save that over like two years or five years that's really going to impact folks with the profit sharing dynamic. And anyways it kind of speaks to some of that benefit in agency that I think occurs. Um let me pivot our conversation a bit. I'd like to talk about retention. So we were talking a little bit already about making a job more attractive if there's employee ownership. But I'm wondering about retention. Brian, you made a com you made a comment to us yesterday when we were talking before um we got into this and you said that now you're able to look over your employee base and you're starting to identify folks that you're like I think they're going to retire here and it was a bit of a my my sense of when you shared that was this idea that you think that maybe people now where they maybe would have just stayed for a shorter period of time might see themselves staying longer. And I'm wondering if you could speak to what it is about employee ownership that you think enables employees to think of staying longer at a job where they might have in the past cycled out. I was thinking about this because you you had sent me notes and you were going to ask me about retention and and what our challenges were and there are some challenges that we had that were had nothing to do with employee ownership. We had people at retirement age that's always a challenge. Yeah. have people who have children, so they're in the child care age. That's always a challenge. You got to figure it out, you know. Um, but I did think about what what I said to you. Um, and I think that the best thing you can do is create a culture. And you know, you can't promise that everybody's going to rise to the top because it doesn't really work like that. like not everybody's going to become a CEO or want to be a CEO, but you can kind of you can promise a culture that is less exploitive. I mean, that's that's on the face of it, right? You you're not exploiting people for another set of people to become wealthy. And I always tell people, money doesn't go anywhere. It's here. It's all here, right? The accounting is transparent. And transparency is something I get asked about a lot. There's there's a lot of mythology about cooperatives, you know, like they vote on everything and you can see everybody what everybody makes and a lot of it's BS. Like no, you can't you can't see personnel files and no, we don't vote on everything. But there is a transparency. You know, tomorrow night I'm going to report on to the general assembly. There's going to be 30ome people there who are owners and I have to give them financials and they're real financials. It's not BS and it's and none of it is money that goes to outside investors because we owe them. We're still paying our loan, but that's different. Um, so I I guess the best thing I can say is you retain people when you're telling them where they are. You're telling them why they're here and they can they can attach to it however they need to. Some people are going to stay in the same job and rise up with seniority and they don't want to become some other job, but some people do. But you're telling them all the time where you are, why you're here, what your values are, what the mission is. It's the best you can do really. Yeah. You know, one of the things in our conversation yesterday when three of us were talking before today, we talked about this. There's a gap right now in research to know exactly how many people stay longer and how much longer. We at Project Equity this we're in our 11th year and all of our clients and I know Brian you guys do this but all of our clients give us data every year we are building a database so we can see the impact of employee ownership long term but it takes time to build that up and to get all the data and be able to identify these trends. One of the trends I hear from owners and I hear from like the employee owners and I hear from the chairman of the boards or CEOs that I'm talking to of employee owned businesses is that their employees are staying significantly longer than they used to. But I don't have the like hard data on that one yet and we're we're building it. But Liz, I'm wondering if with your lens of recruiting, if you could help us understand what you think might be happening, why employees would be staying longer at an employeeowned business. Well, certainly we have sort of a again a younger older population kind of thing going on, whereas in my parents' generation, it was very common for people to get a job out of college and stay in that job until they retired. they didn't job hop, right? That wasn't really it. It's just less common. Now, the general knowledge that young people share with each other is you're not going to grow and you're not going to get a raise if you stay in a company. Like, if you stay, the only way to increase your seniority or decrease your pay is to keep changing jobs, right? And often it's like every two to three years. And for companies, it's a huge cost because the cost of losing an employee that you have trained and worked with and supported and then the cost to hire someone new is always a lot and every hire is a risk of is this person going to work out? I mean, a a really difficult employee can cost you also a lot of money. So, you really invest in your people. Um, and I know this is going on at a lot of organizations or companies where you've got this lot of turnover and you know, how can you stop that? Um, and I think what Brian mentioned was this idea that you're committed and and invested in it. Not just you don't have to jump all over the place to, you know, the work you put in is how the business is going to do, right? So if you know there's definitely a mentality of we are creating this we are you know when we all work hard we the business grows and we do well and that payout is real and that's the motivation to grow not like I don't have to change jobs I actually just have to give more to this job I have so I think it's good for the company and it's also prevents this like constant moving of people, which is also exhausting for the employee themselves. Um, and people don't necessarily want to do that. A lot of them are like, I left my company, I loved it, but I'm never I didn't have a future there. That's what I'm seeing, but Oh, I love that. That and it really sparked a memory. I was talking with some employee owners at a place that they kind of do assembly line work and they were talking to me about the experience of it and they're like, "Now that we're owners, I just throw the thing back to the guy in front of me if he doesn't do a good enough job. It's not like I'm just trying to like make my boss happy." It's like, "No, we need to do this right so that we can get that profit at the end of the year." And and it was such an interesting frame that it no longer, and Brian, I think this speaks to your point, it no longer is, oh, we're making more money for the owner by doing a better job. We're making more money for ourselves. Yeah, I do. I mean, we've lost a couple of people to tech companies pay much more and you know, they both instances they had debt and children and you know, I don't blame them. they they had to do what they had to do. And so you you're you're going to be in the business world. You're you're competing with others. Um but you you can just like I say, you can just be clear about what you can offer. And people do they do take pride in being here. I can I can definitely feel that. Yeah. Yeah, that makes sense. So, um, we're kind of we've been in having this wonderful conversation for about 30 minutes. I just want to remind folks if people have questions to please put them in the chat window. And one of those questions I think is really kind of on point for where we're at right now. So, I'm going to bring that into this. So, I have somebody that wrote, "What are some of the specific examples of responsibility of ownership? What are some of the example duties of employees would be would be responsible for in an employee owned company? Sorry, I don't have my glasses on. Um, so you know, Brian, I think you and I can maybe speak to this a bit, but one of the things that I'm very aware of in this conversation is there are multiple approaches to employee ownership. I alluded to just a few of them earlier. ESOPS, employee ownership trust, worker co-ops, and I know Brian, you're in a worker co-op, so it's got its own kind of flavor of employee ownership. But just from a broad perspective, I would say that some of the responsibilities of ownership are transparency around financial things. So there's usually a at least a highlevel profit and loss statements, balance sheets, those kind of key documents that we use to understand the financial reality of a business are being shared with the broader employee ownership base and with that I know comes education right and so people start understanding how money flows through the business and those types of things. So part of the responsibility is understanding how the business model functions. One of the other dynamics I've seen in employee ownership is there's this governance role. And so oftent times employees can run for the board of directors. There might be a couple seats on the board of directors um that are made up of employee owners. And one of the things that's always interesting to me is if you look at the corporate world, once you start having a larger business, you've got shareholders, you already have a board of directors. And so we're not adding a new thing for the business world. We're just bringing kind of some of the best practices of board governance and we're bringing that down to more midsize smaller businesses. And so sitting on the board of directors is another example of the responsibility. Um the other thing I find is a responsibility for ownership is this idea of taking ownership in terms of the responsibility of the product. And I alluded to that earlier um where you've got the employee owners that can't just say, "Well, I'm just doing this for the owner Joe, right? It's it's about myself." But Brian, what are some of the specific examples of responsibility you have seen at ATAL that employees have stepped into? So, well, there's a couple of ways to think about this. Um, and to answer the question maybe a little bit for for whoever asked it. I mean, it's all about the bylaws in our structure. It's about the bylaws. And the bylaws will say what your rights and your obligations are when you become a member. And we often talk about that that, you know, you have an obligation to show up for the meetings. You have an obligation to vote. You don't have an obligation to run for the board. We sure would like it if you did. Um, you know, but one thing I also talk about quite a lot is that if you sit on the board, you have fiduciary duty. That is not um that is no small thing and it's not just a nice sounding weird word. It means you are responsible financially to make decisions that affect all the owners. So there's there's a real seriousness there and it requires that the books are done right, that the reports are done right, that you can see financials that there, you know, and there's a whole sometimes I I like to say we we have to run a business and we have to run a co-op. There's two things we have to run. You have to do them both. Well, um, but the the co-op, if the board is really going to stand as my partner and have fiduciary responsibilities, they have to have financial education. So, we're all talking the same language. They So, I we we assigned a book. Yes. You know, that you guys have training, too. But we we went a little farther with that. Um because people they don't really understand the balance sheet versus a P&L. Why should they? I mean, why should anybody? Unless like love that stuff. But you you really need to see what it is if you own a company. And you know, and then of course you get kind of the the downside of that is you're always dealing with the promise of control. Like, okay, I can control stuff. Well, no, you can't. But neither can a shareholder in you know name your big oil company. It's like you you have this you have agency and you can talk amongst yourselves and you can decide like well okay this is how this is how we want to make our money you know this is it's worth doing XYZ you know when the greening committee says we can do this thing but it's gonna it's going to cut into your profits. Hey, board of directors, you represent the owners. There's your balance. Uh, green or money. Which kind of green do you want? And and that means that I don't have to sit here alone and make decisions like that. We can talk amongst ourselves and we can, you know, I'm an owner, too. So, yeah. But it is an obligation. Yeah. It's not um it's not just a piece of stock that you buy and you sit. It almost sounds exactly like how any other company works. It's just that the profit doesn't go to the owner. It goes to the owner employees. Yep. Because most companies have, you know, boards that are there and you have to listen to your employees and they you might not have a say or you may have a say, but y it doesn't sound that different from any No, I don't think it is. whole village and you don't have to pay the king. Exactly. Exactly. Right. There are tax benefits as well. I don't want to that's a whole another webinar. So, we'll we'll do that. Um I have a question, Brian, following up on that and I know there's another question um about pros and cons of current employees, but is it possible that you can have an employee at at who doesn't do anything besides their job? They are an owner, but they don't go to meetings. They're not on committees. It's ownership is not a requirement. But if they are an owner, do they have to do other things as owners? Yes, they have obligations. Lose their membership if they do not show up for meetings. Um, yeah. Okay. Yeah. And I think what I like about that example is it speaks to the various approaches to employee ownership. So, under an employee ownership trust, there aren't those requirements. And so that's why we work with businesses to help identify what is the right approach of employee ownership for you. And I think it gets to this question about pros and cons. But um some employee groups really want that deep level of engagement and they want that responsibility thing. And so as we work on bylaws, I've worked with some companies that are like, you need to show up for your annual general meeting as a member at least once a year. And if you miss two years in a row, you might lose your membership. Yeah. And it's that idea that like you need to be responsible. You need to carry that. And then I've got employee ownership trusts where they're like, you know what, that's just not realistic for our workforce that they're going to want to come and add this extra kind of dynamic to their life. They'd rather just be an employee and also be able to see that, you know, a little bit of insight, deeper insight into the how the business model functions, but also still be able to get the profit sharing. And so that's where I think that there are multiple approaches of employee ownership that are going to be right for whoever that is. And I'm just going to put a plug here because you know we are hosting here at Project Equity. You can go on our website. You can set up free consultations with our folks to be able to talk through these options with you. Anyways, I'll put that aside now. Um but in response to that um you know it works for us to do it this way with a lot of governance because we're highly specialized. So we need our people to be highly trained and specialized and stay and that quality control is really important. We handle high value stuff. We go into very you know we deal with the 1% of the 1% a lot of these collectors. We're in houses. We have NDAs that we sign. You really that ownership mentality is kind of important that you, you know, it just works for us to have a highly trained, highly specialized workforce that we retain. It's just the type of business we're in. Yeah. Yeah, that makes a lot of sense. Um, Liza. Yeah. I just keep seeing new questions come in, so I'm like I want to make sure we get to them. Um, before we move on to the one that just came in, um, cons. I mean, my imagination, my imagination, I'm imagining that one of the biggest cons and and Brian, I'm not sure if this is true or David from your experience is that now you are a business owner and that is not easy, right? Like you're dealing with all the stress and the worries and the things that you would if you're a business owner. You know, I've got an example of that, Brian. I'll let you jump in in a second here. I I'll never forget I was working with an employee group and they were finalizing deciding if they were going to buy the company for like there was a deal structure on on on the table and one of the individuals said, "Boy, if we buy the business for this amount, it's going to keep me up at night." And one of the other employee potential employee owners was like, "But we can't do it." And I kind of chimed in there. I said, "That's what ownership is. like I can't tell you how many owners stay up at night because they're worried about stuff. And there was like a oh yeah, you're right. That is what ownership is. And so I love what you picked up on there that ownership carries that responsibility and there are some cons. Um but Brian, what it looked like you had some fun. Oh, we have a joke around here. We was like it was so easier when we could just blame Scott. Now it's like, oh crap, it's us. Yeah. Yeah. So I think that's one of the cons. I think another con can be maybe not a con but a bit of a risk. I have found that when employee businesses convert to employee ownership, so like when a business converts to employee ownership, sometimes the employees come up with a lot of expectations about what it means. And so what we find that we spend the first two years of that postcon conversion support on is helping understand what the expectations are for what voice means, what control means and really focusing in on and this gets to one of the other questions around the board of directors. Helping the board of directors understand the separation between what is governance and what is management or operations and knowing that the governance piece should not bleed into operations. You've got an ownersh You've got a leadership structure that has been working well that knows how to make the right decisions. They know how to they've been they're specialists in determining what the bids are for deals, right, Brian? When you guys are bidding for a contract, I'm sure you don't want the board of directors evaluating those bids. That would just be a mistake. And so part of what I think the risk is is to ensure that the employee owners don't try to overstep what they should be focused on. And I continually say to folks, I'm like, your primary goal, I want you to run a great employee owned business, but your primary goal is not figuring out the perfect governance. It's continuing to figure out the perfect business. Because if the business is running well, it's going to make everything else run well as well. Yeah, it's absolutely true. And and you do there's a lot of work to dispel mythologies of, you know, of what a co-op is. Yeah. And you just have to do the work. It's it's fine. Yeah. There's a question here. I I What does a board of directors look like for a smaller company? I don't know how to answer that. You might. Yeah. I you know, I do kind of um one of the things there are a lot and you keep I feel like I keep saying the same thing. There's a it's a spectrum of employee ownership and there's kind of different vehicles and if you have a business that has like 10 employees the way the board of directors is going to function and look is very different than if you have a business of say 50 employees or 200 or even you know in Spain I think the largest worker co-op is tens of thousands of worker owners right and so each size creates its own needs and how it's function and how it structures and I don't want to get too specific into kind kind of the nuances of a 10 employee business versus a 25. But um I'm wondering Liza, you've been hearing Brian and I kind of talk back and forth about this. What are you hearing in our conversation that stands out to you with your kind of lens as a recruiter? Huh. Well, I think that the biggest challenge in the recruitment world when you're recruiting to employee owned is exactly what you said, David, which is a lot of people don't really understand employee ownership. So, as you're recruiting into an employeeowned business, like we're saying, there's so many different types, there's so many different structures, you have to do a lot of education of people coming in. Like, very few people have worked in an employeeowned company before. I mean and this is testament to the work that project equity is doing which is to grow employee ownership and you know being in this space I've definitely seen the explosion of employee ownership. When I first started working with project equities many years ago there were only six people working there and um you know although it it it had its you know there were people very committed to it now I feel like it's just jumped a lot. the amount of people I interview for roles who are already knowledgeable and aware of employee ownership is has grown. But in terms of the corporate, sorry, there's a car alarm going off outside. I don't worry, it's filtering it out pretty well. Okay, good. Um but yeah, in terms of, you know, when you're hiring people into a employee ownership space, often they don't really know what that means or what that's like, what it would mean to be an owner, you know? So there you do have to do a little more education for that. That's kind of the the piece that I'm like picking up on, not as a negative. I mean, I think it's a really great positive and I think there's a lot of excitement around it, but as someone who's hiring, you do you're going to have to explain the structure. Yeah. Yeah. Yeah. You know, we're running out of time here. Um, Brian, I want to come back to you, um, because I think you sit with a really unique perspective as being in leadership, being the leader of an employee owned business, working with employees that reported to you before they were employee owners and now are reporting to you as employee owners. Um, and I'm going to give a little bit of a story. So, one of the things that happened for me, um, probably about four years ago, I was working with a group of employees that were moving towards employee ownership, and we were going into the P&L, profit and loss statements, balance sheets, and one of the individuals was like, "Why are we spending so much on paper products?" And it was a coffee shop. And the previous owner was sitting there and said, "Well, that's that's the coffee cups we spend that much on." And this person was like, they were they were a barista. They're like, "My goodness, like I'm never going to double cup a coffee cup again for a customer unless they ask for it." And it was this kind of like aha moment where I think the understanding the profit and loss statement, seeing kind of the annual cost for that one line item was like an eyeopening experience for them to say, "Hey, we need to reduce it." Um, so, so Brian, I guess my question for you, and maybe this could be our last question unless something else pops in here. Um, how have you seen employees change now that they are employee owners and you've kind of been down this road for for many years? Are you finding a tangible difference in how employees are showing up at work? Yeah. And I'm gonna try and not be too long-winded. Um like I said for us it's almost the opposite. Um the way our company was run before it was extremely kind of uh we used to call it a culture of scarcity like you never you never bought anything. you did, you know, you never we did so much with so little and and the owner was just really frugal, really tight with money. And for myself, I had to kind of push through that and make people believe that we could actually buy this thing that we need and charge more for being, you know, there was a there was a lot of uh understandable anxiety because we had just bought this place, we owed money. Now all of a sudden everybody wants to do everything differently. We everybody has an idea that it's going to cost us money and it's my place to kind of say yes that's a good one. No, that's not a good one. Oh, let's wait on that one. And there was just a lot of people that most of us weren't really sure this was going to be okay. Like that we could actually pull this off. And because our financial past is so kind of clouded with the entanglement of the personal wealth of the owner and the company, which most of them are like, Yeah, exactly. It's just it it's just this unbelievable disentanglement job. Um, you know, you just really need to keep keep your employees aware of what's happening at the same time giving them agency but at the same time you you can't let go you have to show that you're managing the situation. Yeah. Um, so what I see is this shift to be a for the employees to be able to trust a system because it it showed itself to be profitable for four years. So now we can kind of like because the first thing you're getting is like it's just like you say it's like well it's kind of the opposite like for us there was like well maybe we shouldn't use so much tape. tape's expensive, you know, like, okay, I'll use less tape. I'll think about it. But on the other hand, there's all these ideas about, well, you bought a a new truck, so there goes our bonus. No, that's not how it works. That that shows up on the balance sheet, not the P&L. We advertise. And then everybody goes, "What the hell are you?" So now it's the other the other side of the coin. It's like, no, this is how you run a business that wants to be here for 20 years. Yeah. I don't know. It's a rambling answer. No, no, I think that's helpful. And one of the things, and Liza, I'm just going to let you kind of respond to this last comment I was going to make. One of the things that I have found is that part of employee ownership is it gives employee owners a chance to do something outside of their job description. be it running on the board of directors or being on a on a finance committee or an HR committee. And and I've wondered if there isn't an opportunity to allow people to maybe stay a couple years longer at a business because they have rewarding or new challenging things that maybe aren't, you know, like if you're on a finance committee, you can kind of get your toes wet in the finance world and see like, oh, do I understand this? Do I like this? Is this a new thing for me? Um, as I'm wondering maybe just as a wrap-up if you have any reflections on how that might appeal to kind of retaining business employees over the long run. You know, I've never interviewed someone and I've done hundreds and hundreds and hundreds of interviews, but I've never interviewed someone who said there's only one little thing that I want to do in my life and that's the only thing I want to do all day every day. And a lot of people do love variety in their day, in their, you know, work. And the one thing that people absolutely love is feeling like they're growing and that they're learning. Um, I think being stagnated for too long in one sector and people do get really pigeonholed into a job and a sector and especially Brian where you're so specialized. I mean, there's someone who specifically specializes in framing or packaging paintings, right? Like, that's their specialty. And what an opportunity to get to do something else that's interesting or exciting. I've ne I've never like I absolutely think that people are always excited when they get to learn and grow. Even sometimes people who think that's not what they want to do, like no, I just want to stay in my little hole and do my accounting spreadsheets, you know, and there's nothing else that I want to do. Um, usually they are excited by getting to open their mind up and, you know, it's like traveling. You get to see a new side of the world. Um, and it's really beneficial for them to understand the company as a whole, too. like what you're saying about whether it's that you're not spending enough or you're overspending. You're the what you're really thinking about is what's the best use of our resources, right? Like and are we creating a product that people like and you know that the new truck shows up it's a much better impression than the old clunker that you know exporting a Monae with. You know, I'm just joking. But you know, you're absolutely right. I have to say just to kind of put a real life uh um affirmation to what all the stuff you just said. It's like it is such a privilege for me to see people who like they're a little nervous. They don't want to do this. Oh, maybe you could you could sit on this committee, right? And then okay, cool. Like okay, now you're sitting on the committee and now Oh, h how about you want to present to the full membership? Oh, I I can't speak in front of Yeah, you can. And then you see these people like now they're speaking in front of all the owners. They're reporting on what the committee is doing. It's freaking awesome actually because you can see that they're growing and they are doing something that's not bookkeeping or or driving or whatever the thing is. And uh that is actually one of the huge benefits of this. I you know sometimes we talk about how it's less efficient or whatever you know because so many people have their hands in the soup but it's worth it. The benefits are palpable you know and uh and it's human it's it's humans feeling better. That's what else can you ask for? Yeah. And I'm not going to say anything else. I think you just really kind of summed it up. I just want to thank everybody for joining us. This has been a pleasure to have this conversation with the two of you. I think we could have gone a lot longer. Um, but um, for all of you that joined us, I really appreciate that. Um, we will be sending you a link, a follow-up email with our ebook and a link to this recording. Thank you all for your time. Thank you. Thank you for the invitation. It was a pleasure to be here. Yeah, this one.