What's the Big Deal about ESOPs?
When I succeeded my father as the Chief Executive of Financial Business Systems (FBS) in 1997, our team worked together to create a vision: to build FBS as a company of owners where responsibility, keeping promises, and the freedom and opportunity of “the American dream of ownership” were shared throughout the entire organization. In 2005, we took a major step in realizing that vision when we transformed FBS into a 100% employee-owned company through an employee stock ownership program (ESOP).
Today, FBS is the leading innovator of Multiple Listing Service (MLS) technology and one of the most recognized and respected real estate industry software brands. Unequivocally, we truly believe our success is our employee-owners — which is good, because we now have more than 100 of them.
Over the past 13 years, I’ve had the privilege of witnessing the power of employee ownership unleashed. Our employee-owners embrace the responsibilities necessary to gain the freedom, opportunity, and respect of ownership — three core values for our organization. For us, becoming an ESOP cultivated employee-owners who are deeply vested in customer success and empowered to get great results. It’s a tremendously rewarding culture, and it all stems from putting our employee-owners first.
High Employee-Owner Retention
When we first started our ESOP, our goal was to give everyone in the organization ownership. Our ESOP rewards employee-owners with company stock that appreciates as the company grows, providing both a financial and cultural incentive to stay. But in order to gain the rewards of employee ownership, we need people who are willing to do the work of owners and live out our core values every day.
To that end, the recruiting and hiring process is very important. To future-proof our company, we must add individuals who have the necessary skills and align well with our value system and culture. The topics of employee ownership, culture, and core values are actively discussed during the recruiting process. This helps both parties decide if it's a good fit while setting expectations and eliminating potential culture shock. While by no means foolproof, this helps us hire the right people, maintain our culture, and grow leaders from within.
With shared responsibility and reward across the board, everyone gives their all for the greater good, and in turn, reaps the benefits. This has a way of stripping away hierarchy and getting people to focus on what really matters. We are mutually empowered to create success, which is very attractive for many job applicants.
Once we find the right people, we’ve had tremendous success in retaining them — our overall employee retention rate since forming an ESOP is 96.4% all while increasing headcount by 219% over the last 13 years. This retention rate translates to the kind of longevity that grants us highly knowledgeable and experienced professionals across the organization. When software subscribers call us for support, a business owner always answers the phone. Through this, we've maintained the highest industry-wide client and user satisfaction rates for more than 15 consecutive years. Our employee-owner retention rate helps us provide excellent customer service.
All for One and One for All
The Three Musketeers motto, All for One and One for All, articulates the employee-ownership model so well that we often borrow it ourselves as an internal motto. Employee ownership ties customer success to employee success and bonds employee-owners through shared interest. For us, business is personal and you can’t help but become close to those who care deeply about the same thing as you. As a result, employee-ownership inspires daily behaviors, such as accountability and making customer-focused decisions, that have come to define our company culture.
Our leadership team strives to model those behaviors and values, and that frequently shows up in how we work together to solve problems. Company leaders regularly step across the line to support challenges in other departments. Our team’s generosity is incredible — they act with authenticity and vulnerability to help lift each other up, all of which comes from that owner perspective.
Our ownership culture and value system are intrinsic to who we are and is a powerful differentiator in our competitive marketplace. The power of highly-experienced staff doing what it takes to create customer success is demonstrated with our long, public track record of customer happiness. We maintain a 99%+ lifetime customer retention rate, which is unprecedented in our industry and subsequently impossible to competitively counterpoint.
A Fun, Flexible Culture of Freedom
At FBS, we believe our employee-owners should always be our number one focus. We never miss an opportunity to create a program that bolsters them and lets them know how much they matter. That philosophy has manifested across our culture in many ways — whether it’s our wellness program, our new “long weekend” policy (granting each employee a 6-pack of long weekends each year), or our investment in employee-owner financial literacy.
Independence through ownership only works if our employee-owners truly understand how an ESOP works and how it will impact their lives. At our annual ESOP meeting, we review benefits, the vesting schedule, and show how the ESOP will financially impact owners at different stages of their tenure. We also review FBS’s outcomes and forecast for the coming year.
Our annual ESOP meeting is not your typical powerpoint presentation — it’s a celebration of our company. We fly in all of our off-site team members and individual teams spend time bonding, reviewing the year, sharing highlights, and strategizing for the future. It culminates with a big party where we play games, do trivia, enjoy a great dinner, and give away more swag than I care to admit.
We also have a philosophy of keeping yourself well, and we’ve built a wellness program around that. We have stand-up desks and optional health screenings. In our office kitchen, we have two fridges that are always stocked with healthy foods and beverages so when people need to snack, they have access to better-for-you options like yogurt, fresh fruit and vegetables, and sugar-free drinks. We even have the option to convert a portion of your sick time into wellness hours, so that you can take two hours to attend yoga class or go mountain biking.
By becoming an ESOP, we’ve transformed our employees into owners and transformed the business along the way. By putting people first in the ultimate way, we’ve been able to achieve a culture that is truly all for one and one for all.
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