Words // Lettie Stratton
If you’ve spent any time in or around Vermont and like to farm, garden, or do anything that involves getting a bit of soil underneath your fingernails, chances are you’ve visited a Gardener’s Supply store. Most people who have been know that Gardener’s Supply is a green-thumbed Vermonter’s one-stop-shop, providing tools, help with landscape design, locally grown vegetable plants, fruit trees, and even garden coaching.
But even frequent patrons of the store may not be aware of one key fact about Gardener’s Supply and their success: The company is employee-owned. That means that instead of one owner or a small group at the top controlling everything, company ownership extends down to nearly every employee. That’s a lot of owners. 225 to be exact, plus a portion of the 130 seasonal or part-time workers who meet the requirements for employee ownership.
So how does it all work? Gardener’s Supply has an ESOP—an Employee Stock Ownership Program—that they’ve been making contributions to since 1987, when the company was just a few years old. They reached the 100 percent employee-ownership mark in December 2009, after many years of slowly building up. They were 30 percent employee-owned in 1999 and 45 percent by 2006. ESOPs began in the ‘70s, so Gardener’s Supply was one of the early adopters of the program. Today, there are roughly 7,000 employee-owned companies nationwide.
Cindy Turcot, Chief Operating Officer at Gardener’s Supply, said founder Will Raap wanted to share ownership in a way that was both thoughtful and productive. Raap, who founded the company in 1983, is a well-known hero of the local food movement. In addition to his work with Gardener’s Supply he also helped to establish Burlington’s Intervale Center, the farming and food hub of the Queen City, which just happens to be home to Gardener’s Supply’s Burlington store. “He always believed in a strong ownership culture,” Turcot said. And for good reason. Simply put, it makes a lot of sense.
Employee-owned companies receive tax benefits, protect themselves from being bought out by bigger companies, and, when staff become owners, tend to see employees become more invested in and passionate about the company, therefore working harder and sticking around longer. It’s a win-win for everyone involved.
According to a general social survey conducted in 2012, employees of ESOP companies were half as inclined to seek employment elsewhere than employees of conventionally owned companies. The layoff rate for employee-owned companies is also significantly lower, and a 2013 survey by the Employee Ownership Foundation states that an overwhelming majority of employee-owned companies have reported that adopting the model was a positive step for their business.
Gardener’s Supply is not alone in their alternative model for ownership. More than 30 Vermont companies are either fully or partially employee-owned. These companies include farms, publishing houses, health centers, retail stores, and more. Any kind of company can be employee-owned, but it’s not always an easy process—or the right choice. Turcot said smaller companies, with between 8-12 employees, for example, maybe be better suited to a worker cooperative, which has lower setup costs than the ESOP model.
Turcot said that in addition to high overhead cost, having to adapt to a new company culture can be a hurdle of the ESOP as well. She said one of the great misconceptions about employee-owned businesses is that they’re democratic. “It’s not democratic,” she said, “but we do try to make it participatory.” Encouraging employee owners to become actively involved in the company outside of their daily job duties can be a challenge, but Turcot said Gardener’s Supply has always had that kind of culture. “We’re a very tight community,” she said. Additionally, the Vermont Employee Ownership Center (VEOC) conference provides them with a great opportunity to get together and form a support network and community.
“Vermont has a very active employee-owned community,” Turcot said, adding that the ESOP is a great economic model for the state. It allows proud Vermont-based companies to stay exactly that. They don’t have to worry about getting bought up and being forced to relocate. Instead, companies can rest easy knowing that ownership lies in the hands of their employees.
To see one of Vermont’s employee-owned businesses in action, visit Gardener’s Supply in Burlington (128 Intervale Road), Williston (472 Marshall Avenue), or online at www.gardeners.com.