The Best Practices Guide: Captains of Their Own Ship
Why Torch Technologies is committed to employee ownership
Torch Technologies wants to be in control of its own destiny. Before forming Torch Technologies, the company's founders went through a painful acquisition with another company. After that experience, the founders decided that employees should own the new company.
As CEO and co-founder Bill Roark explains, "I don't want to be in a position where someone's facing a career change or benefit change because some founder has decided to pick up the big check and go home."
Torch Technologies started in 2002 as a subsidiary of another company. Since then, Torch Technologies' management has used an employee stock ownership plan (ESOP) to buy back the stock and put it in the hands of employees.
So far, the company has placed more than 3.5 million shares into its ESOP and is now 70 percent employee-owned. The company's goal is 100 percent employee ownership by 2012.
Torch Technologies' leadership sees many benefits from the ownership philosophy, including motivating employees to work harder. "Our growth rate as a result of this philosophy has been phenomenal," says Roark. "And that sets us apart from similar companies."
In turn, the ESOP also helps the company keep pace with its rapid growth. "It's known in the community now, and it's a key thing that helps us recruit people to the company," says Scott Parker, the company's chief administrative officer.
Torch Technologies' human resources director sees this daily. "The majority of people we bring in are senior professionals—highly educated," explains Julia Michaux. "The biggest selling factor is the employee ownership piece. People are surprised when I explain how they'll have ownership in the company.
"Also," explains Michaux, "our employees don't have the uncertainty and pressures if we were, say, publicly traded or up for sale. It's an additional form of security for them."
Roark says another key to employee security is protecting them from the unplanned.
"We believe the less our employees have to concern themselves with unplanned incidents, the more productive they will be. We believe certain critical plans like short term disability and long term disability shouldn't be optional but rather be provided by the company," says Roark.
"The biggest selling factor is the employee ownership piece. People are surprised when I explain how they'll have ownership in the company."
– Julia Michaux, human resources director, Torch Technologies
What can you learn from Torch Technologies?
- Employees who own part of the company have a greater interest in its success.
- An ESOP can help attract and retain the best employees.
- Employee ownership means greater control and security for employees.
About Torch Technologies
Find out more about their benefits in Torch Technologies's winner profile.
