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In Pandemic, ESOP Companies Laying Off Fewer Employees than Non-ESOP Companies

Oct 28, 2020 | Timothy L. Stewart

Following a trend that occurred in the Great Recession (roughly 2009-2012), the data shows that the layoff rate at ESOP companies during the COVID-19 pandemic is roughly 1/3 of the layoff rate of non-ESOP companies.  This article from Nonprofitquarterly.com details the survey results of a comparison by Rutgers University of how the pandemic has affected ESOP companies and non-ESOP companies in terms of employment continuity.

In 2010, about 12 percent of employees were laid off in non-ESOP companies, versus only 2.6 percent in ESOP companies.  This publication from the NCEO (in collaboration with The ESOP Association) provides more details on these statistics, including how employment sustainability lowers the burden on taxpayers because of reduced unemployment compensation claims.

About The Author

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Tim is President & Managing Partner of DeWitt. He is also a partner in the Greater Milwaukee office specializing in Employee Stock Ownership Plans (ESOPs) and Employee Benefits. He can be reached at 262-754-2869.

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