Unlocking the power of employee ownership in the East Bay
Over the past few years, the Berkeley Office of Economic Development has partnered with Project Equity to advance employee ownership and succession planning in the city. While we’ve helped several Berkeley businesses transition to employee ownership (EO), we believe there is still more potential to be tapped across the East Bay in collaboration with other regional partners.
Earlier this month, Project Equity and the City of Berkeley hosted a roundtable with several East Bay ecosystem actors, including economic development departments, chambers of commerce and nonprofits interested in employee ownership. We discussed the many challenges that employee ownership can address in the East Bay and ways for all of us to partner and increase employee-owned businesses in the region. We had an engaging and enlightening gathering that we anticipate will birth many exciting opportunities for us in the Bay Area.
One main challenge the area is facing is the Silver Tsunami which is also hitting the entire country. According to our research, 51% of locally owned businesses in the East Bay have owners at or near retirement age. Without an alternative, many of these employers will close down, or be bought for consolidation by out-of-town competitors.
The second challenge we discussed was employee retention. During the past couple of years, we’ve seen workers quit their jobs at some of the highest rates on record. Studies have shown that when combined with a supportive culture, employee ownership reduces employee turnover and increases loyalty.
This led us to the third challenge facing the East Bay region. Many workers are economically insecure with little to no assets or opportunities to build wealth. According to research, workers experience far more financial advantages in employee-owned companies such as better pay, asset building through profit sharing, and enhanced financial security. Additionally, workers of color in EO companies have substantially more wealth than their peers. By increasing employee ownership in the East Bay, we can secure workers’ access to opportunities to build assets while addressing the racial wage gap.
During the roundtable regional partners discussed how we might come together to unlock the power of employee ownership in the East Bay in light of these challenges.
The group focused on concrete actions that each attendee could do individually in their role or regionally as an organization. We also discussed how we might collaborate to advance systemic changes. Some of these ideas include hosting organizational workshops to train teams on EO, identifying and referring legacy businesses to EO experts like Project Equity, and hosting educational workshops or events for business owners or business advisors. The group also brainstormed longer-term collaboration around policy in the region.
The roundtable showcased the growing momentum behind employee ownership as a powerful tool for building more equitable and inclusive economies. We also deepened our relationship with local municipalities and nonprofits in the East Bay.
Project Equity would like to thank the City of Berkeley for their vision and collaboration and for all of the attending organizations for their dedication to uplift their communities. We look forward to working with this team to create a more just economy.