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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

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— Susan Courter, Director of Business Development, R.E. Crawford Construction
I would like to commend the US Builders Review staff for their work in developing and writing a fantastic article for Miller Contracting Group, Inc. It was truly a pleasure to work with their professional and well organized staff.
— Chuck Daniels, Business Manager, Miller Contracting Group Inc.
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.
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— Crystal Leos, Business Development, DALLASWHITE Property Restoration
What a great team US Builders has put in place! Having worked with Victor Martins a few years back, I was pleasantly surprised that he remembered our experience and contacted us again about an updated article. Not only did Victor brainstorm with me about content that would resonate with readers, but he assigned an excellent writer, Molly Shaw, to our account. Her interview with my client, Bardi Heating Cooling & Plumbing, was professional and succinct; as was her writing style. We had very few edits and were pleased not only with the article, but how well it was enhanced by color photos. Much appreciated!
— Karen Bird, Owner of Strategic Marketing Services, Bardi Heating Cooling & Plumbing
On behalf of Alfred Sanzari Enterprises, I would like to thank you for showcasing our company as a cover story in US Builders Review, and express our gratitude for a job well done in putting together an impressive editorial product. We already have received a great deal of positive feedback on the article and are confident it will be a very effective tool for sharing Alfred Sanzari Enterprises’ story, and our new hotel project, with a national audience of industry professionals. Please also extend our thanks to everyone on your team that helped in any way to produce this article. This was truly a collaborative effort.  Your staff listened to our feedback and was incredibly professional and accommodating to our requests throughout the entire process. We welcome the opportunity to collaborate with US Builders Review on future projects.
— Ryan Sanzari, Director of Operations, Alfred Sanzari Enterprises
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Jennifer Wilhelmsen – Director of Human Resources, EJH Construction Inc.
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)

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