What is an Employee-Owned Company?

Community IT is an employee-owned company; 100% employee-owned through an Employee Stock Ownership Plan (known as an ESOP).  

ESOPs are not well known in some circles. If you have questions, we are ready to answer them!

What is an Employee-Owned Company/ESOP?

“The most common structure for broad-based employee ownership in the U.S. is the employee stock ownership plan (ESOP). Approximately 6,500 U.S. companies have an ESOP, and approximately 14 million U.S. workers are ESOP participants.

An ESOP is a type of retirement plan, … that invests primarily in company stock and holds its assets in a trust for employees. ESOP participants (employees) accrue shares in the plan over time, and are paid out by having their shares bought back, typically after they leave the company.”

From the National Center on Employee Ownership (NCEO) 

How does being an employee-owned company benefit employees?

All eligible employees accumulate shares during their time at the company at no cost. When the employee leaves, the company is obligated to repurchase those shares.

As shareholders, the employees have a hand in electing the company’s board of directors. The board is responsible for hiring and managing the executive leadership of the company, including the CEO.  

Employee-owned companies often make educating their staff on the business of the company a priority, because of the employees’ direct financial stake in the company. At Community IT we take that education seriously, which helps this culture of “employee ownership,” which leads to a more positive working environment and improvements in service, quality, and financial results. The business engages employees directly in business literacy, strategic engagement, and meaningful understanding of company decisions.

Employees who are share holders are incentivized to remain with the company and contribute more directly to its success, through performance and employee loyalty. The business, meanwhile, engages employees directly in business literacy, strategic engagement, and meaningful involvement in company decisions. This close alignment of company and employee incentives leads to a positive work environment and a variety of societal benefits.

Academic studies have shown that ESOPs look to protect staff during economic downturns and are less likely to layoff and furlough staff than non-ESOP companies during recessions.

Other studies evaluating employee benefits at ESOPs have shown that ESOPs tend to deliver higher retirement savings and also lead to better savings practices in employees starting out their careers. A 2017 report by the National Center for Employee Ownership (NCEO) found that being in an ESOP was associated with higher median job tenure among employees under 34. That is, younger employees tended to stay with employee-owned companies for longer periods than their peers who changed jobs more frequently. This longevity has a positive impact on retirement savings. 

This article on how ESOPs work is a good visual explanation from NCEO.

Are many Managed Service Providers (MSP)s also employee-owned?

The vast majority of MSPs are small, privately owned businesses, usually closely held by one or two persons. Community IT is part of a small cadre of MSPs that recognize the business advantages of being an employee-owned company.

Long-time employees are rewarded for their role in building our company and have a greater incentive to stay. Many of these employees have extensive institutional knowledge that benefits the customers of our MSP. 

The best MSPs, like Community IT, have tuned their services and culture to meeting the unique needs of the specific market they serve. In our case, this is nonprofit clients exclusively. Employee ownership through the ESOP structure helps to preserve and enhance our company culture, creating a virtuous cycle of improved service delivery.  

How does being employee-owned contribute to the Community IT culture? 

Employee ownership has provided a number of significant benefits to Community IT over the years. We are passionate about serving nonprofit organizations, and the desire of employees to serve this sector is aligned with the incentives of the employee-owners. 

Employee ownership has also created a culture of independent thought and individual decision making. This is vital in the IT services industry, in which employees are faced with challenging technical problems every day. Solving these problems requires independence, resourcefulness and timely decision making. Employees are empowered and encouraged to make decisions that will benefit the client.

Because our company goal is to provide excellent service to nonprofit organizations, we choose to re-invest most of our profits in the business through employee compensation, professional development and business improvements. 

In fact, providing ongoing professional development exploration is a core value at Community IT. Many of our employees have come to us as the result of a career switch, and bring the strength of a variety of backgrounds and skill-sets to our tech support teams. We encourage staff to pursue traditional professional development and all necessary certifications, of course. But we also have a culture of encouraging employee growth into areas where they see a need they can develop the skills to fill.

Employee ownership also means that we control our own destiny and are not tempted to pursue a big payoff through mergers and acquisitions, or big profits for an owner by cutting corners – to the detriment of our goal to provide excellent service delivery. Clients can depend upon the company to continue to provide dedicated support for years to come.

Careers at Community IT

If you are interested in employment at Community IT please see our job openings on our careers page. We are the right place for you if you find fulfillment in helping others succeed and love mastering new technologies.

Our employees stay and grow with us, and over half of our staff have been with us for over a decade. Community IT is an employee-owned company with a positive, sustainable workplace that promotes professional development and a healthy work/life balance.

We have been 100% employee-owned since 2012. We are always implementing “green” technologies, and are active as board members and volunteers in community organizations. If you value integrity, continuous learning, and hard work, we encourage you to apply!