DOVER — Citing the Great Resignation, a leading Dover-based construction firm recently announced that it plans to offer its employees the chance to own a piece of its company in a bid to attract and retain talent.
The Great Resignation describes how a large number of people nationwide are reportedly leaving their jobs during the COVID-19 pandemic to look for better opportunities. The trend is forcing companies to find ways to navigate the effects of the pandemic and re-evaluate how to retain employees.
George & Lynch, a major player in the construction industry on Delmarva, announced in a press release on Wednesday that it plans to give 30% ownership of its company to its employees as part of an Employee Stock Ownership Plan.
Politicians and pundits on both sides of the political spectrum have tossed the term Great Resignation back and forth, some calling it a negative omen and blaming the other side while others are seeing it as a positive sign of change.
Karryl Hubbard, secretary of Delaware’s Department of Labor, views it differently.
“People talk about the Great Resignation, but resignation sounds so final. I think of it as a shake-up, in that you find many people leaving their former positions, or laid off, and sort of have a wakeup call and are finding other opportunities with other employers out there that are willing to provide them with some flexibility … they didn’t have with their previous employer.
“There have been resignations for sure, but a lot of these workers are going back to work,” Sec. Hubbard said.
Currently, Delaware is experiencing a jobs imbalance — there are more available jobs than job seekers. There are many different reasons for the difference in labor numbers. Many older workers chose to retire during the pandemic and not rejoin the workforce. Delaware’s business landscape has also grown and companies are trying to attract people to come to the First State.
“Since April 2020, when the economy really took a hit because of COVID, labor participation has increased for most groups,” Sec. Hubbard said. “Men, women, white and nonwhite — the demographic we don’t see is older Americans. I think we have a trend where folks that are or were near retirement age have decided to just retire.”
The Delaware State Chamber of Commerce has worked with its members and state leaders to help companies through the effects of the pandemic. The group praised George & Lynch’s ESOP plan announcement as a positive step.
“We are currently experiencing a situation where there are more jobs available than people to fill the vacancies. Employers are becoming more creative and using incentives to keep or hire employees. A greater number of employers are offering higher wages, hiring bonuses, profit sharing, and ESOP programs as ways to attract and retain talent. An example of creativity is the company ownership arrangement recently announced by George & Lynch. This is another way for them to both recruit and incentivize employees to stay with the company longer,” said Michael J. Quaranta, president of the Delaware State Chamber of Commerce.
“Like all excellent employees, our workers have other options, and we are grateful for their efforts and dedication that have made this company what it is today,” said George & Lynch President Chris Baker.
Known for its highway and bridge work, new-home construction site work, underground utilities, and paving work, 98-year-old George & Lynch is often recognized by its green-and-yellow “GL” logo on its trucks and construction equipment across Delmarva.
The transition to the ESOP program and the purchase of existing shareholders’ stock will occur over several years.
As existing shareholders approach retirement, they recognized a need to plan for the ownership transition, Mr. Baker said. The plan also provides an additional long-term retirement benefit and incentive to all eligible employees. Company management will not change; Baker and all existing employee-owners will continue to work in the business.
“We hope that this ownership change both recognizes their hard work and helps promote retention and improve recruitment,” Mr. Baker said.
To help with the transition, George & Lynch hired Menke & Associates, the nation’s largest adviser specializing in ESOPs.
About 22,000 companies have adopted ESOPs since 1974. Most are small — 80% have fewer than 200 employees and are privately owned, according to Menke officials.
Sec. Hubbard also applauded George & Lynch’s announcement.
“Many companies are trying to find ways to attract and retain employees and that is just one vehicle that companies are using,” she said.
Sec. Hubbard encourages all Delaware companies to evaluate how they compensate their employees.
“There are a number of things to look at — compensation, flexibility, job requirements. We encourage employers to take that review of their internal operations to see what they can bring to the table to be that attractive employer,” she said.
For firms looking to find new employees, Sec. Hubbard suggests checking out the Delaware Joblink program here.
“One thing I would encourage them to do is to recruit through vehicles like our Delaware Joblink. Not everybody uses our system, a lot of people use Indeed.com which is good, but we have resumes and staff that are ready to go. We can go to the system and pull out resumes of people that are ready to work. It is our job to match employers with good employees and we take that seriously and we do it every day.”