When the Covid-19 pandemic struck in early 2020, millions of Americans were forced to work from home almost literally overnight. The advent of Zoom, and countless other such platforms and tools, made the switch to remote work fairly seamless for many American businesses. For others, however, it was impossible; many—particularly in the foodservice industry—simply could no longer function at the same level until restrictions were lifted, and this posed a huge threat to ordinary workers’ ability to earn a living, the survival of the businesses they worked for, and the economy as a whole.
The US government acted quickly, pushing through the Coronavirus Aid, Relief and Economic Security (CARES) Act, which authorized states to extend unemployment benefits by up to 13 weeks under the Pandemic Emergency Unemployment Compensation (PEUC) program. Nearly 90 million people benefited from the CARES Act; stimulus checks of $1,200 were sent out in April 2020, and Donald Trump later approved a further $908 billion pandemic relief package that consisted of $600 stimulus checks.
This unprecedented social welfare program undoubtedly saved jobs and businesses—and therefore also prevented millions from falling into poverty or destitution—but with people effectively being paid to stay at home, with more time to spend with their family or on leisure, many began to reflect on the role of work in their lives.
For generations, Americans have defined themselves first and foremost by their trade or profession, but Millennials and Generation Z in particular increasingly see work as a means to an end and not an end in itself. Research by Gallup indicates that 70% of Millennials feel disconnected from their job and company, while 21% have changed jobs within the last year—more than three times as many as in the rest of the population.
This shift in employees’ relationship to work and their employer has taken the form of an historic rise in employee turnover; colloquially known as “The Great Resignation or “The Big Quit”, it is causing a profound upheaval on the US job market.
Moreover, with job opportunities and social interaction severely limited because of Covid, huge numbers of immigrants went home during the early months of the pandemic, at a time when immigration fell sharply; the number of permanent residence immigrant visas awarded fell by 48% between 2019 and 2020, and the number of temporary visas fell 54%. Although applications for permanent visa went back up slightly in 2021, they remain well below pre-Covid levels, while the number of temporary visas granted dropped another 30 percent.
The combination of all of these factors, as well as historically low US unemployment rates, which were almost cut in half between January 2021 and January 2023, has led to a structural shift in the balance of power between employer and employee. With an ageing population, the situation is only going to become more tense: “if it’s a labor shortage right now, it’s going to become even more acute in a few years,” says Nelson and District Chamber of Commerce executive director Tom Thomson. Workers in most industries can find new jobs relatively quickly; they are in a position of strength and they know it.
As a result, many companies are forced to reflect on innovative new methods for recruiting and holding onto their employees. An adequate compensation package is the bare minimum, but young people in particular want to feel engaged in their workplace, and profit sharing or equity ownership schemes are increasingly seen as valid ways of encouraging and rewarding performance and fostering a sense of community.
The Ownership Works initiative, launched in 2021 by a consortium of 60 corporations, is predicated on exactly that principle. A not-for-profit organization, it partners with companies to help them roll out shared ownership programs. It aims to give employees a voice as well as a share in the company’s equity; by recognizing workers’ contribution and helping them build personal wealth, employee ownership programs have the added bonus of making them more engaged in the company’s present and future.
If Ownership Works’ approach is innovative, the idea of sharing profits with workers is not a new one. American Velvet Co. implemented a profit-sharing plan as far back as 1940, following a 16-month strike, and it has not seen union action since. American Velvet’s president, Jacques D. Wimpfheimer, puts this down to the increased alignment between management and staff: “in a sense they can feel every day they are participating, that what they do is effective and that they are in a way working for themselves,” he says.
French private equity firm Ardian, which joined Ownership Works as its first Europe-based partner last year, also has a well-established employee profit sharing program. “Profit-sharing has been part of our company policy for 15 years,” says Ardian’s Head of Sustainability, Candice Brenet. “We organized our first distribution of profits to employees in 2008, following the creation of an internal charter detailing the principles of shared value, and to reward our portfolio companies’ employees for their efforts we aim to roll out a shared ownership program to at least three companies by late 2024”. Ardian’s profit sharing policy is unique in that every employee gets the same share of profits, wherever they are in the world, but the firm has also opened up its share capital to employees; 80% of Ardian employees are shareholders, and this ownership structure is not only reassuring to potential clients, because it is a marker of the alignment of management and the workforce, it has boosted employee engagement and significantly reduced turnover.
The world of work is changing; workers spend the best part of their day on the job, and they are looking for purpose and meaning in what they do—not just a check at the end of the month. Maybe this philosophy of a more equitable approach to corporate ownership could ease firms’ recruitment problem and also help the younger generation fall back in love with corporate America.
