Why this founder lets employees own part of his company

Larry Connor's strategy to get his workforce invested in their future at his organization is simple: He lets them actually invest in the company. 

Connor has offered his team at The Connor Group an Equity Stake Ownership Program since 2002, giving workers the option to gain equity in the organization, and profit from their successes, too. 

"The basic premise is that if you expect people to act and work like owners, you should make them owners once they've earned it," says Connor, founder and managing partner of The Connor Group. "But partnership, as with most things at The Connor Group, isn't given but earned. We expect elite performance and, in exchange, offer elite benefits and opportunities not found at other companies."

Today, around 6,322 companies in the U.S. offer Employee Stock Ownership plans, according to the National Center for Employee Ownership. At the Connor Group, any employee can become a partner three to seven years after joining the firm. Employees are encouraged to prove themselves by consistently hitting measurable goals, being role models in the organization, being solutions-oriented and living the company's core values, Connor says. 

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When they've been identified as someone who fits the criteria for partner, they're nominated by leadership and placed "on the radar," where they're assigned a mentor and a leadership development plan tailored uniquely to the applicant. When the plan is completed, typically within a year, they are promoted to partner.

Despite offering their ownership program for over a decade, Connor stresses that the partnership can still be stripped from someone who fails to maintain the standard.

"There's a reason most companies don't do this kind of thing: It can get complicated," Connor says. "When we started the program, we agreed that rewarding and incentivizing our top performers who are committed to career advancement and living our core values was the right thing to do."

Connor recently spoke with EBN about the advantages of offering ownership as a benefit and what it could mean for the evolution of employer offerings overall in the future. 

How are partners financially benefiting from this arrangement?
As we re-engineer, refinance and sell properties in partners' portfolios, they start to get distributions. They also get distributions from operations and Connor Group earnings. We've tried to structure it so that five to six years in, in a typical year, a partner is making as much off their partnership as they are off their salary. In addition, partnership comes with a slew of additional benefits, such as full company-paid family healthcare plans for all partners, financial planning, will and estate planning, tax preparation, and a bonus ranging from $10k-$50k.

How has adding ownership benefits improved retention and recruiting strategies?
It's certainly helped retain key individuals and top talent. We believe that people lead growth, not the other way around. Success starts by hiring the right people with the right competencies and commitment to excellence. Offering ongoing benefits tied to the growth of the firm is also a long-term focused strategy which helps us build, develop and retain our top performers doing exceptional work. It also is a draw during the hiring process as we essentially tell people with no experience in our industry that we will train them to be successful at The Connor Group, and that they can build wealth and access benefits usually only offered to C-suite executives. 

How does the program affect your company's culture? What's been the feedback?
Feedback has been positive, partly because of a sense of accomplishment and partly because they're able to build wealth and generational wealth for their families. Most companies wouldn't offer an ownership stake to a groundskeeper who is exceptional at their job, but we do and have. Associates see employees of all ages and roles in the program and are motivated to join its ranks.

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Our partners understand that while introducing a new partner may initially reduce their share, it is a strategic move that benefits the entire company. Our collective philosophy is centered around the belief that each new partner brings unique value, driving the firm's overall success and, in turn, expanding the "pie" for everyone. This inclusive approach has proven its merit over time; historical data substantiates that with each new partner's contributions, our company has not only seen an increase in the size of the pie but also in the value of each slice. This collective success is a cornerstone of our culture and a testament to the strength of our partnership program.

Why is it important for employers to get more creative with the kind of benefits and perks they offer their workforce?
Employers need talented individuals to drive their businesses forward. Period. Without the right people, the best plans mean nothing. To attract and retain the most talented individuals, companies need to offer them something they can't get anywhere else — be it the opportunity to take the reins of their own career; build wealth; access unique benefits, support and training that will help them achieve greatness; or all the above. This will mean something different at each company, but if you are demanding excellence from your employees, you need to offer them something special in return.