Disclaimer: These communications are intended for the employees of HB Global. We recognize that the general public will have access. The views expressed in these communications represent Bob Whalen in the context of HB Global and may not apply to broader audiences.
October is Employee Ownership month, and we want to celebrate 15 years of being employee-owned!
HB Global (at the time, HB McClure) transitioned to becoming an ESOP in 2010. Since that time, we formed HB Global, which now houses 12 subsidiaries across the United States. Each subsidiary has been integrated into our ESOP, meaning that we now have over 1,700 employee owners in our company! One of our subsidiaries, BBEC, is celebrating 25 years of employee ownership, having been an ESOP before being acquired by HB Global.
Through our ESOP structure, we’ve been able to share the value we’ve created as a company with all the labor contributing to that success. We’ve also been able to develop a culture that allows autonomy as close to the customer as possible while ensuring accountability in not just the work that we do but also how we do it.
To celebrate Employee Ownership month and 15 years of being an ESOP, we’ll be covering some foundational topics.
What is an ESOP?
While to some this may be obvious, it’s too important not to cover what exactly an ESOP is. An ESOP is an Employee Stock Ownership Plan. Through this plan, all employees are able to become owners of the company through the allocation of company shares. These shares are allocated to employee owners over time, and in retirement, they receive money based on the financial success of the company because of those shares.
Generally, when people want to have some sort of ownership in a company, they need to invest their own money to reap any sort of financial rewards from that company in return. At an ESOP, however, the employee doesn’t need to invest any of their own money to become an owner. At HB Global, an employee just needs to be over 18 years old and have worked 1,000 hours over the last 12 months to be eligible to start receiving share allocations.
ESOPs are regulated by a variety of laws and governing bodies to ensure that the ESOP is functioning as intended. ESOP companies are actually required by law to put the profit they create primarily back into the company shares that allow employee owners to benefit from the financial performance of the company.*
It’s important to understand that although every qualifying employee gets to become part owner that an ESOP doesn’t become an “every person for themselves” culture. There is still a professional management team in place, and there is still a structure that allows each decision to be made by the appropriate role and experience level. While we do try to create as much autonomy as close to the customer as possible, we also ensure there are processes in place to ensure decisions are being made appropriate for the role and scope of each employee owner. We balance the role of leadership with the expertise of all employee owners.
ESOP companies are able to have a traditional leadership structure while also allowing all employees to see financial benefit from the impact they make on the company through their work.
Why is HB Global an ESOP?
Bob Whalen led the charge to transition HB McClure to an ESOP in 2010. The move was strategic because becoming an ESOP would help ensure the legacy and longevity of the company, align with Bob’s vision for the culture of the company, and ensure that Bob McClure’s intent to take care of his employees after he sold the company was met.
Becoming an ESOP created a culture based on accountability, responsibility, and shared purpose, because the success of the overall company would directly impact the success of each employee owner. Each individual would be incentivized for the common good of the organization.
This creates a unity of purpose throughout our teams. Many businesses have owners who are outside of the company, but the company still needs to prioritize getting the value that is created back into their pockets since those owners invested their own money. In an ESOP, the competing priorities are eliminated. Since the shareholders are the employee owners, ESOPs are taking care of their employees by sharing the value that is created. Being an ESOP helps us to fulfill our mission at HB Global of empowering employee owners to make our company a great place to work and creating value.
Being an ESOP also aligns with our core values of Trust, Team, Grit, and Growth. For us to be successful, all employee owners need to Trust that the value being created is, in fact, being shared back with them, and there needs to be a Trust within teams that everyone is working towards the good of the organization. Focusing on Team allows us to be better problem solvers and more efficient and effective in our work, which creates more value. Because each employee is also an owner, a sense of Grit is instilled in each individual to do what it takes to get the job done. Finally, there is a Growth mindset at the individual and company level, which generates more value that can be shared with employee owners.
What We’ve Achieved as an ESOP
Between 2010 and 2024, HB Global has created over $200 million in value that has gone to employee owners’ ESOP retirement accounts. To look at this another way, the average amount in an employee owner ESOP account in 2024 was approximately $104,000. We could not be more proud of the financial success that we are helping our employee owners achieve through the success of our company.
As an ESOP, we’ve also been able to create a culture that makes us a great place to work by aligning with our mission and our core values. We’re able to have an employee-first mindset that feeds the success of the organization. We believe that engaged employees create raving fans that lead to superior financial success which is shared back with employees. This further engages each employee and starts the cycle over again.
At HB Global, being an ESOP is more than just how we structure our business. It forms the foundation for the impact we want to make as a company. We want to put our people first. We want the labor that leads to the success of the company to share in that success. We want to serve our customers with high quality work. And we want to positively impact our communities. An ESOP sets us up to more easily be able to do all of that.
Have your own thoughts or questions about the benefits of employee ownership at HB Global? Send them to [email protected].
* Employee Ownership Foundation, “What is an ESOP?”, https://www.employeeownershipfoundation.org/articles/what-is-an-esop#:~:text=An%20Employee%20Stock%20Ownership%20Plan,stock%20of%20the%20sponsoring%20employer.