CAREER FOCUS
ESOP offers engineers and the firms they work for adaptability in an ever-changing world as it rewards professionalism, hard work, and loyalty.
Written by Robin Flanigan
ON ITS FACE, an employee stock ownership plan (ESOP) is a type of retirement plan in which employee owners are allocated shares of company stock. But the advantages don’t stop there. ESOPs are also a way to increase productivity, boost retention, and more.
“Employee ownership is a great business model, a great cultural model, and can be a huge competitive advantage for firms,” said Derek Kohl, vice president of operations at BL Companies, headquartered in Meriden, Conn. “We have highly motivated and engaged employees, and that directly translates into improved quality of work and creativity on fast-paced, challenging, complex projects for clients.”
Photo: Getty
A Different Ownership Structure
BL Companies, which offers architectural, engineering, environmental, and land surveying services, has been an ESOP for 19 years and has twice been named the ESOP company of the year by the New England chapter of the ESOP Association—most recently in 2025. It has been a 100-percent employee-owned ESOP since 2011.
According to the National Center for Employee Ownership, there were 6,548 ESOPs in the United States in 2022, the most recent year for which data is available, holding total assets of over $1.8 trillion. While ESOPs are found in all industries, they’re common in manufacturing.
In its 2024 list of the nation’s 100 largest employee-owned companies, architecture and engineering firms accounted for nearly one-quarter of them.
Regulated by the Internal Revenue Service, an ESOP is a qualified retirement plan governed by the Employee Retirement Income Security Act (ERISA) but differs significantly from 401 (k) plans and pension funds. ESOPs are funded by the company, not employee contributions, and invested in the company stock. Beyond the significant retirement benefit, this mechanism of employee ownership is also a great tool for succession planning.
In the Loop
At BL Companies, through quarterly employee-owner meetings and weekly CEO audio calls, employees stay informed about the company’s performance and strategic goals. An annual “ESOP Year in Review” meeting is designed to enhance understanding and engagement, revealing financial information at a detailed level.
“A lot of ESOP companies embrace this more transparent approach to communication—to share company performance, how they’re growing, and what their future plans are,” Kohl said.
That transparency is not as apparent in large, publicly traded companies that must cater to shareholders, or in privately held companies owned by investors, founders, or a small group of shareholders.
Employees in privately held companies, for example, “may not know about strategic plans or be informed about succession planning,” Kohl added. “I’ve seen examples where even project managers are not aware of the financial performance of their projects.”
In contrast, BL Companies has 11 employee-led committees, including the ESOP Communications Committee. That committee encourages open conversations and involvement in virtually all aspects of company focus areas and provides key recommendations foundational to the company’s decision-making.
In a September 2025 column for Inc., BL Companies CEO Carolyn Stanworth explained that employees say “I have a gift for you” when about to offer feedback. “It may seem simple—silly, even—but that phrase changes everything,” she wrote. “It signals respect, invites listening, and creates space for honest, constructive conversation. Feedback becomes less about correction and more about growth.”
In turn, the recipient restates what was heard to affirm understanding. From a recruitment and retention standpoint, Kohl said, this “open form of productive communication has a tremendous tangential benefit of relationship-building and connectivity that I believe is even more critical in today’s hybrid environment… This confirms that what is said and what is heard is aligned. There is an agreed-upon approach to facilitate more effective work collaboration.”
In addition, all employee-owners go through a robust, foundational-level leadership development program to understand soft skills critical in the consulting profession, in which solid communication and collaboration are key for gaining and retaining clients.
“A lot of ESOP companies embrace [a] more transparent approach to communication—to share company performance, how they’re growing, and what their future plans are.”
—Derek Kohl, Vice President of Operations at BL Companies
Get Advice
Qualified advisors can help companies that want to learn more about ESOPs conduct feasibility studies, structure a deal, assess financing options, optimize tax benefits, and ensure regulatory compliance. Some offer free webinars that go over such topics as deal structures, tax strategies, valuation, and myths. ESOP-related conferences are another way to learn more.
An ESOP invites innovation, collaboration, and long-term sustainability. Without it, “you don’t have that deeper sense of commitment from employees” when navigating changes in workloads, Kohl said. He explained that employees invested in an ESOP are more likely to take on an extreme workload to meet aggressive deadlines and are willing to learn a new skill in a different discipline to pitch in during periods of lighter work.
Such allegiance helps ensure that companies remain adaptable in an ever-changing world. It translates to the bottom line, which rewards employees through incentives and other benefits, as well as their ESOP account for retirement.
Non-ESOP companies can’t match that level of engagement and loyalty, Kohl added. “Maybe they survive, but I don’t think they’re thriving like how ESOPs tend to perform,” he said.
Robin L. Flanigan is an independent writer in Rochester, N.Y.
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