REENGINEERING THE ESOP: BUILDING WEALTH FOR THE NEXT GENERATION
When it comes to operating a company under an Employee Stock Ownership Plan (ESOP), Kansas City-based Dialectic Engineering is putting its recruiting eggs into the ESOP basket.
The mechanical, electrical and plumbing engineering firm became an ESOP in 2016, giving its employees an instant promotion to employee ownership. Since that time, CEO Greg Trees has championed the model, not only for Dialectic but for the ESOP community as a whole. He serves on the Heart of America leadership team for The ESOP Association as its president-elect.
For Trees, the ESOP model takes the firm to a new level.
“We’re not an engineering firm doing business; we are a business doing engineering,” Trees said. “That’s what makes our business model compelling for creating value.”
INVESTING IN EMPLOYEES
Being competitive with salaries and offering an array of work opportunities that employees want to do, all in an environment that appeals to multi-generational people, are conscious choices that were made at Dialectic.
“It’s an investment we’re willing to make,” Trees said. “Pay is great and experience is great. I think at Dialectic we’ve got both.”
Dialectic’s ESOP created the machine that helped bring an array of clients to the firm, giving employees an advantage to work in a variety of services across a wide range of industries. Trees said this diversity in the day-to-day lends itself to a benefit that employees don’t necessarily see at other firms.
In order to recruit talent, Trees said Dialectic needs to be more competitive with salaries, from entry-level on up.
Dialectic employees are offered a variety of perks, including the ESOP, which provides every member of the team an opportunity to be part of the leadership and ownership of the firm. The ESOP also incentivizes employees to work harder in the best interest of the business.
In addition, Dialectic employees have flexible schedules, ongoing professional development opportunities and access to on-tap beverages. 
“I think we provide a really great environment to work in, but the money also has to be there,” he said.
According to the Employee Ownership Foundation, businesses have lower turnover when combining employee ownership with the right culture, giving ESOPs a competitive edge over non-ESOP competition. In fact, turnover is three times lower at ESOP companies than conventionally owned businesses.
Trees recognizes generational differences and intends to remedy any gaps that exist as one generation retires and a new one enters the workforce. It’s a math equation based on output, he says, and a reflection of work ethic and work/life balance.
“It’s an equation that we’re working to solve,” Trees said. “It’s not easy, but it’s certainly not impossible.”
ReCRUITING THE NEXT GENERATION
Finding new employees is no easy task, and turnover is at an all-time high in the industry. Every company, though, is shorthanded, Trees said, but he believes it comes down to Dialectic being the better place to work and grow in a career.
The engineering industry is facing workforce shortages. There are simply more jobs than people. One fix that Trees believes will go a long way is higher pay for the employees who are doing the work.
“We have to make designing buildings look attractive, something we’ve done a terrible job as an industry selling,” Trees said.
With the addition of human resources veteran Amy Simmons as chief people officer in June, Dialectic now applies innovation and creativity to attract and retain top talent. Simmons finds this a tremendous opportunity.
“Understanding Dialectic’s operations, we can make a substantial business impact while nurturing the fun, inclusive culture of this growing ESOP,” Simmons said.
Flexibility is also key, Trees said, and not just in how often one works from the office. While the younger generation wants that flexible schedule, they do want to be around their peers and in the office.
“They want to be able to get up and move around, and not feel like they are chained to their desks,” he said.
They want to bring their dog to work. They want to log in from a coffee shop. They also like the flexibility of being able to flip back and forth, working from home and working in the office, so they don’t feel like they’re stuck one way or the other.
This flexibility, plus the opportunity to be an employee-owner, in turn, makes the ESOP culture of Dialectic attractive to Gen Z.
“At Dialectic, we take pride in being employee-owners, and when we feel a different sense of responsibility, every person realizes the work they are doing has a bigger impact,” Trees said.
New employees have the opportunity to get in on the ground floor of a younger, growing ESOP, essentially building their wealth from the time they are vested until retirement.
Dialectic is engineering a better experience, not just for clients, but for employee-owners. Not only does it set us apart from other companies, but it’s the right thing to do for our employees, our clients and the community.
To find open positions at Dialectic Engineering and further explore our ESOP culture, visit our Careers page today.