New ESCA survey data shows ESOP employees more
by Karen Kahn
Employee-Owned S Corporations of America (ESCA) has released findings from a survey of millennials working for employee-owned firms (S ESOPs) indicating that these employee-owners are better prepared for retirement than their peers at conventionally owned companies.
The survey found that two thirds of millennials — adults born between 1981 and 1996 — working at employee-owned firms expect to retire before age 65. That compares to only one third of millennials working at conventional companies.
Two-thirds of millennials working at employee-owned firms expect to retire before age 65.
The financial insecurity of the millennial generation has been well documented. In May 2019, CNBC reported that 62 percent of millennials are living paycheck to paycheck. Thus, the survey results (see infographic) are striking:
- 66 percent of millennial employee-owners expect to be better off than their parents, compared to 41 percent of their peers at non-ESOP companies.
- 56 percent of millennial S ESOP employees had at least six month’s salary saved for retirement, as compared to 66 percent of peers at non-ESOP companies who had nothing saved for retirement.
- 46 percent of millennial employee-owner respondents had a net worth of $50,000 or more, compared to 15 percent of their peers at conventional firms.
Notably millennial employee-owners also understood their retirement needs better than their peers at non-ESOP companies. Of respondents, 91 percent of those at S ESOP companies felt they had enough information to prepare for retirement, as opposed to just 44 percent of their peers at non-ESOP companies.
Millennial employee-owners also reported greater opportunity in the workplace.
In addition to reporting significantly more retirement savings than their peers, millennial employee-owners also reported greater opportunity in the workplace. Among S ESOP respondents, 81 percent reported having a personal stake in the company’s success and 72 percent said they saw opportunities for their own growth in the business, compared to 41 percent and 50 percent, respectively, for their peers at conventional firms.
The survey, conducted by John Zogby Strategies during July and August 2019, included 402 non-ESOP and 203 ESOP millennial and Gen Z employees. It builds on retirement research that the National Center for Employee Ownership released in late 2018, which showed that across age groups S ESOP employees have more than twice the national average savings in their retirement accounts, $170,326 compared to $80,339. In that survey, researchers found that among those approaching retirement (55 to 64 years old), ESOP employees had an average of $426,000 in retirement savings as compared to $142,000 for all U.S. workers in that age group.
Surveys of employee owners universally confirm that broad-based asset ownership could narrow the growing wealth gap in the U.S. For more data on ESOP companies, visit the data center at the National Center for Employee Ownership.
Karen Kahn provides communications consulting and editorial support for Fifty by Fifty.