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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

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
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
Everyone that we worked with was polite, professional, responsive & very good to work with. It was amazing to see the ideas transformed into the final product. We are very happy with the end results and would not hesitate to work with them in the future or recommend them to other business!
— James Kowalski, Owner, Kowalski Construction Inc.
Ryan at TrueLine was a pleasure to work with and we wouldn't hesitate to recommend him or TrueLine to anyone in the future. They were professional, organized and great to work with through the process!
— James Cahill, President and Partner, J. Calnan & Associates
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
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.
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.
TrueLine Publishing was a delight to work with. They were extremely patient and worked diligently to get our article written and published. The team always responded in a timely manner and was courteous. I look forward to working with TrueLine Publishing in the future and will recommend them to other businesses.
— Crystal Leos, Business Development, DALLASWHITE Property Restoration
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
I was contacted as a nominee for the Greenbuild Editor’s Choice 2016 recognition and I couldn’t have asked for a better experience. Working with US Builders Review has been a blessing for my company. Erica Berry took an awesome interview in the initial call as she gathered data for the article. She was concerned about how we became us, and she made me feel important by listening and taking notes. Then there is Ian Nichols who made me feel so comfortable in sharing my story, and Molly Shaw who interviewed me as well, as she was getting ready to create an awesome article about my company -- and I must say she nailed it on the first run! What a pleasure it has been to work with everyone. This feature on Container Homes USA will help me push the company into the forefront at the Greenbuild Expo 2016.
— Derrick C. W. Childs, Director Construction & Design, Container Homes USA

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