Overcoming Barriers to Employee Ownership: Insights From Small and Medium-Sized Businesses.

This article investigates the limited adoption of employee stock ownership plans (ESOPs) among small-to-medium sized businesses (SMBs) in the U.S., identifying key barriers such as owners' lack of time, money, and skills. Through interviews with 30 SMB owners across industries, the research finds that while ESOPs offer benefits like improved employee retention and productivity, their high financial and management costs deter many SMBs. Instead, a "shared ownership light" model—combining cash-based profit-sharing plans with participatory management practices like open book management—emerges as a more feasible alternative that can still generate financial and cultural gains. The study suggests that service providers could better support SMBs by offering templated profit-sharing models, financial literacy programs, and communication tools to reduce adoption complexity and management burden.