Sudbury-based engineering firm BESTECH
is for sale—but not in the sense you may think.
This year, BESTECH introduced an
Employee Stock Ownership Plan (ESOP), a rare move for a small- to
medium-sized business, in an effort to reward and retain employees
for their service. Under the plan, eligible employees can purchase
shares of the company and reap the benefits along the way.
Pat Dubreuil, BESTECH’s
vice-president of operations for sales and marketing, said the
reasoning behind the move is twofold. After watching the company grow
at an impressive 30 per cent per year over the last five years,
owners Marc Boudreau and Denis Pitre wanted to reward employees by
letting them buy in to the company.
“They’re seeing this company grow
and it’s building well and they want to share this wealth with
their employees,” Dubreuil said. “They’re saying, ‘We’re
being successful and it’s because of the employees, and we want to
make sure that you guys benefit in our growth.’”
They also regard the ESOP as a smart
retention strategy. As stakeholders, employees have a vested interest
in the company’s success, so by fostering a sense of responsibility
and ownership, the employees will continue to work hard for success
because they want to, not because they have to, Dubreuil said.
In this inaugural year, five per cent
of the company was up for grabs, and another five per cent will go up
for sale next year. Dubreuil said the program was an overwhelming
success.
“We sold all of the shares that were
issued in this first offering,” he said. “We had a 54 per cent
participation rate from our employees. That’s phenomenal when you
think about it. It shows that we’re doing the right thing because
people are responding like we hoped they would.”
Only seven per cent of privately owned
companies choose to go this route, but those that do see “exponential
growth,” Dubreuil said.
Behind the decision to introduce an
ESOP is the belief that, after an employer’s basic needs are met—a
good wage and good quality of life—employees crave a higher level
of motivation and satisfaction from their work.
BESTECH believes that satisfaction can
come from working for oneself and contributing to a vibrant
organization that’s generating interest in the industry. BESTECH
was named one of the top 50 Canadian small to medium companies to
work for in 2012.
According to the criteria, employees
are eligible to enrol in the ESOP after completing one year of
service (an exception was made for the first round, however, and
employees with six months’ employment were eligible). Their
suitability is then weighed around tenure and salary. So, an employee
who has been there a long time can purchase more shares, for example,
while an employee who hasn’t been there as long, but who makes a
higher salary, based on expectations in their role at the company,
can also purchase more shares.
Stock and cash dividends are issued to
shareholders on a regular basis, and a profit-share program is also
in place, which disseminates profits throughout the company.
Already, the plan is having the desired
effect, Dubreuil said. Immediately after being introduced, the ESOP
was generating buzz amongst employees and the ownership mentality
kicked in. The company is now trying to increase transparency and
improve communication to foster a sense of stability.
Innovative thinking has raised the
company’s profile, Dubreuil said, and as the company is awarded
high-profile Sudbury contracts for projects like Xstrata Nickel’s
Fraser Morgan Mine and Vale’s Totten Mine, the result has been a
host of good-quality applicants vying to work for BESTECH.
Once the success of the ESOP program is
known, Dubreuil believes other similarly sized companies may follow
suit. And he views that as a good thing.
“In the end, we realize that if we
help other companies in the area, it brings up the talent pool,
because it attracts more people to Sudbury and creates a better
quality of life for everybody,” he said. “That affects our
employees, so that’s a very focused approach.”
www.bestech.com
www.bestechcareers.com