As you know from reading this blog, we have discussed Employee Motivation and how communications and motivational techniques may be more effective if the Motivational Buttons of each generation are targeted. Employee Ownership: Adapting a Powerful Business Strategy to Attract and Retain the Next Generation of Talent discusses how employee ownership structures will need to be adjusted for the values and career goals of the next generation of talent (often referred to as Generation Y or the Millennials). The article notes that 80% of the "100 Best Companies to Work For" have an ESOP or other form of employee ownership. It also discusses the imminent shortage of talent as predicted in The War for Talent and asks if employee ownership is the "magic bullet" to attract and retain the talent of the future:

The answer is no, not unless employee-owned companies modify employee ownership to appeal to the next generation.

Companies have created many different ways to unleash employee ownership's capacity to increase productivity and loyalty and develop a team of driven employee-owners. Research has shown that what really makes it work is offering enough ownership to have a significant impact on employees' financial future, helping people feel and think like the owners they are, and creating a shared understanding of the company's performance and a common commitment to enhancing it. Building upon these established tactics, modifications will need to be made to attract the next generation of workers whose priorities and lifestyles are very different than those of their parents.

The article notes that allocations based on compensation (e.g. contributions) and tenure (e.g. dividends) can be discouraging to high-performing younger employees, and suggests some plan design changes to make an employee ownership strategy more powerful in the next generation:

To start, employee-owned companies can eliminate their minimum-age requirement for ownership, shorten the hours of service required before allowing participation in the ownership program and offer early program entry dates. Shortening vesting schedules and permitting early diversification would make retirement-based ownership programs more transferable. Adding nonretirement- based ownership programs would allow younger employees to take advantage of the short-term benefits of ownership if they so chose. By making the above modifications to an employee ownership program, employees can think about their ownership as more portable and more accessible.

It also discusses adjusting the education program to provide more emphasis on planning for the future, sharing a summarized version of the actual valuation report, and including the stock price history and average account balance growth on the annual statements.