New Study Finds Advertising as Being Employee-Owned Aids Recruitment

A new study reported on at the 2015 Rutgers Employee Ownership Fellows Program shows that companies advertising as employee-owned should have much more success in recruiting higher-skilled employees. The as-yet unpublished study, "Applicant Perceptions of and Attraction to Employee Owned Companies" was conducted by Stan Gully and John McCarthy at Cornell and Jean Phillips at Penn State.

The study had three parts. One was of undergraduates, who were asked to self-report their SAT or ACT scores. Two different otherwise identical recruitment ads were given to the participants, one that explicitly stated the firm was employee-owned and one that did not. The results show that higher-scoring students were significantly more likely to prefer the employee-owned company.

A second approach looked at a sample of 147 working professionals recruited through Amazon's Mechanical Turk, a crowdsourcing Internet marketplace that enables individuals and businesses to connect to do jobs computers have a hard time doing. The average age of respondents was 36, with 14.8 years of work experience. Twenty-one percent had experience working for a firm with an employee ownership plan. After completing consent forms, participants were randomly assigned to respond to descriptions of employee-owned firms or non-employee-owned firms. The study found dramatic differences in how participants perceived such factors as empowerment, engagement, job turnover, and other dimensions. On a seven-point scale, employee ownership companies typically rated around a six, and other companies half that or less. A second study looked at 279 working professionals, but this time screened for prior management experience. Again, the result showed that higher-skilled people were much more drawn to employee-owned companies.