What's Happening?
As a significant number of 'baby boomer' business owners in the U.S. approach retirement, many are choosing to sell their companies to employees rather than external buyers. This trend, described as a 'silver tsunami,' involves the transition of ownership
of approximately six million small and medium-sized businesses by 2035. According to a report by McKinsey, this shift represents a 'once-in-a-generation wave of ownership transitions.' Business owners like William Stockwell of Stockwell Elastomerics have opted for employee ownership to protect their companies from potential negative impacts of external buyouts, such as relocation or closure. This approach not only secures jobs but also motivates employees by involving them in the risks and rewards of ownership.
Why It's Important?
The move towards employee ownership is significant as it helps preserve local jobs and maintain the integrity of businesses that might otherwise be altered or dissolved under new ownership. This trend is particularly important in the context of the U.S. economy, where small and medium-sized enterprises play a crucial role. By transitioning to employee ownership, these businesses can potentially increase productivity, offer higher wages, and reduce the likelihood of layoffs. This model also aligns with the values of many retiring owners who wish to ensure the longevity and stability of their companies, benefiting both the employees and the local economy.
