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ESOP: Why One Major Company Decided to Give Employees Control

HB McClure, a US Builders Review feature company, adopted an employee owned stock ownership plan — and for good reason

As soon as Bob Whalen became owner, he gave away his company—to the employees, that is.

Whalen is profiled in the upcoming US Builders Review Winter II edition and his counter intuitive approach to ownership of HB McClure Company, an HVAC services contractor headquartered in Harrisburg, Pennsylvania, isn’t at all unusual. HB McClure, like a growing number of construction companies, is an ESOP, or employee owned stock ownership plan.

ESOPs are a method of corporate governance in which employees are shareholders of the company they work for. They help decide the direction of the company and benefit when the company does well, just like any stockholder, giving them incentive to work harder and stick around.

For Whalen, and any larger employer, there are practical reasons for becoming an ESOP: making employees shareholders is cheaper than a traditional buyout.

But he also believed that by putting the company in the hands of employees, HB McClure would thrive through a happier, more dedicated workforce.

It worked. Since Whalen took the reins eight years ago, HB McClure jumped from 200 to 500 employees. Its stock grew by 50 percent each year. “I’ve always believed in teamwork,” he says in the story. “If you get everybody working towards the same goal you can accomplish unbelievable things.”

“I’ve always believed in teamwork. If you get everybody working towards the same goal you can accomplish unbelievable things.” – Bob Whalen, President at HB McClure Company

Whalen is not alone in succeeding through an ESOP. The National Center for Employee Ownership (NCEO) estimated in 2015 that there are 7,000 ESOPs in America, a growing number of them in construction. Taking into account other forms of employee ownership, eight percent U.S. corporate equity is controlled by employees, NCEO claims.

What’s more, the organization’s list of top 100 ESOPs included eight companies that are purely in construction, including the number two company, CH2M Hill, an international engineering firm.

Preliminary research from Case Western Reserve University in Cleveland, Ohio, suggests ESOPs might be more effective at acquiring other companies because they encourage communication and transparency. HB McClure is early proof: it acquired 11 companies in 8 years.

But my interest in this story goes beyond validating an idea that is, after all, accepted. Rather, I have a personal stake.

US Builders Review is becoming an equity sharing business, which, similar to an ESOP, empowers employees by sharing profits and so creating a better work space.

And so magazine staffers are joining the very builders they write about in a simple chorus: “let the good times roll!”

Subscribe now for an email alert when this story is published—you won’t want to miss it!

Testimonials

Kyle Gahm was instrumental in coordinating this project from beginning to end. He was always available and a pleasure to work with. It would be a pleasure to work with Kyle down the road. Bill Keaton was very impressive in raising money from advertising which resulted in ASE getting the cover story, so thank you Bill. Lia Prysunka and Jeanee Dudley are both very impressive individuals who deserve a lot of credit for this featured piece. They were both very patient and accepting of any changes we suggested. The format, quality, and resolution was awesome. To sum it all up: Our upper management, who never have been high on PR and things of this nature said that it was "absolutely fantastic" and were blown away. They now are requesting multiple copies of the full magazine and are very proud of the work you all put in. Thanks again.
— Ryan Sanzari, Director of Operations, Alfred Sanzari Enterprises
I’m blown away with the value that could come out of our partnership through this article. Working with the US Builders Review team is something that I have never experienced before and every day I feel even more privileged to be with EJH Construction, I never take for granted the opportunities that have come my way.  I am so excited about what our future looks like based on the relationship that has been built with the US Builders Review team.
Jennifer Wilhelmsen – Director of Human Resources, EJH Construction Inc.
Thank you all your efforts in putting together such a great article about our company in US Builders Review. DH Construction appreciates the professional manner in which your team worked with us to achieve the stateside exposure we were after; especially taking the time to get all of the facts correct. In short, the article was extremely well put together and we have already received a great deal of feedback, interest, and compliments as a result of the piece. Once again, we appreciate all the effort, and without a doubt, we will not hesitate to work with your organization again in the future.
— Daniel Harrigan, Principal, DH Construction
Kyle and his team were very professional and patient in explaining their program to us. Their communications were clear and concise and did a great job of guiding us through the process of getting published in their magazine.
— Michael Henthorn, Owner, Henthorn Commercial Construction
I was contacted by the company to write a review on my business. They handled the process very efficient and professional. The pictures came out great and the article was perfect. I am very happy with their work.
— Kirt McGhee, Owner, K4M Construction
The process was simple: we were provided questions that the writers wanted to discuss, we were interviewed, and then we got to see a few drafts before the final version went to print. Given the quality of this publication, on behalf of Giroux, I can assure everyone that all of my partners would be happy to participate in similar articles in the future.
— Barbara Kotsos, Director of Marketing & PR, Giroux Glass
The team at US Builders Review is professional and did a great job with your published article. They asked for and listened to my feedback and responded quickly to any requests I made.
— Susan Courter, Director of Business Development, R.E. Crawford Construction
It was an absolute pleasure to work with the writers and editorial team at TrueLine Publishing for our recent article in US Builders Review. From the start of the project, it was apparent that everyone involved was very concerned with accuracy and getting the facts right. They were also very conscientious about soliciting our feedback and ensuring that we were happy with the content and with the manner in which Giroux Glass was described in the finalized piece.
— Barbara Kotsos, Director of Marketing & PR, Giroux Glass
We are excited to be featured as a case study in US Builders Review and look forward to sharing our company’s story with a national audience.
— Ryan Sanzari, Director of Operations, Alfred Sanzari Enterprises
The staff was very helpful and easy to work with while developing our story. They were always open to our ideas and provided us useful information to maximize our visibility using social media. We were certainly pleased with final article.
— Daryl Whitmer, Marketing Program Manager, Harrison French & Associates (HFA)

LATEST EDITION

Winter III 2017

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