Photo By Norwalk Furniture
NORWALK, Ohio - Norwalk Furniture has entered into an agreement to transition to an employee stock ownership program (ESOP), effective Sept. 1. The custom upholstered furniture manufacturer currently has 275 full-time employees at the 440,000-square-foot facility located in Norwalk, Ohio.
According to Furniture Today, the program for full-time employees will be funded entirely by Norwalk. Employees will get share points based on their longevity with the company, with the value of shares dependent upon the long-term performance of the organization.
"We have to have good employees, and this gives us the tools to do that," Caroline Hipple, company president, told Business of Home. The company will continue to be led by its current management team.
Seemingly a growing trend within the woodworking industry, ESOP firms are on the rise. In May 2018, Wisconsin's KI Furniture became one of the nation's largest companies to sell to its employees. Whitewood Industries, Stevens Industries, Kentwood Office Furniture, and tooling firm Pinske Edge are also 100 percent employee-owned.
Are ESOPs a good thing?
Giving employees ownership has a few advantages. Many employees will feel that there's more at stake and as result, be more engaged. Companies with high employee engagement see 37 percent lower absenteeism, according to Gallup.
There is some concern about ESOP models though, as they tend to be complex and expensive - especially for a very small business. Some owners are also hesitant to trust employees with that level of responsibility.
But incentivizing employee-owned models could be especially important today, as data suggests Millennials are starting businesses at the lowest rate of any generation.
Founded in 1902, Norwalk Furniture is listed in FDMC 300, a ranking, by sales, of the largest wood products manufacturers in North America. Hipple was named a Wood Industry Market Leader in 2019.
Watch a video (below) highlighting the company's manufacturing.
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