As employee engagement in the United States plunges to its lowest levels in a decade, a growing movement is advocating for a bold solution: employee stock ownership. With just 31% of employees feeling engaged at work, according to Gallup, and record-low confidence in company futures reported by Glassdoor, business leaders are seeking new ways to reforge the bond between companies and their workforce.

Pete Stavros, co-head of global private equity at KKR, has been championing employee stock ownership plans (ESOPs) as the answer. He believes that giving all employees—not just top executives—ownership stakes in their companies can radically transform corporate culture, improve retention, and build real wealth for workers.

“When we survey employees across our portfolio companies, CEOs are often stunned by the dissatisfaction revealed,” Stavros said. Based on decades of private equity experience and his father’s journey working for a small Chicago construction firm, Stavros argues that employee ownership can significantly boost morale and financial wellbeing.

Under an ESOP, all workers receive equity in the company, allowing them to build wealth as part of their retirement planning. Advocates say this model addresses key challenges for companies, including worker turnover, engagement, happiness, and even broader societal issues like financial literacy and wealth inequality.

Stavros’ work has shown real results. When KKR acquired CHI Overhead Doors for roughly $600 million in 2015, they implemented a broad-based ownership program. Upon selling the company to Nucor for $3 billion in 2022, CHI employees received more than $360 million collectively—most of which went to hourly workers.

Despite such success stories, the adoption of ESOPs has been relatively slow, with only around 250 new plans formed annually, mostly in smaller industrial firms. Regulatory hurdles, tax complexities, and litigation risks have slowed wider adoption, especially among larger corporations.

To counter this, Stavros is advocating for updates to the federal law governing ESOPs, supported by a bipartisan coalition in Washington and over 50 organizations. He believes legislative change is essential for scaling employee ownership across America.

Wayne Berson, CEO of BDO USA, offers another compelling case study. Facing talent shortages and high turnover in the accounting sector, BDO explored multiple restructuring options but ultimately chose an employee ownership model. Berson noted that turnover among ESOP firms averaged just 5.9% compared to 39% across the industry. BDO’s own turnover dropped from 18% after implementing the strategy.

“To create a sustainable and profitable business, you must invest in your people,” Berson said. Nearly two years in, BDO has seen improved retention, stronger employee engagement, and a more energized workforce.

Both Berson and Stavros agree: employee ownership isn’t just a better retirement strategy—it could be the key to rebuilding trust, motivation, and prosperity in corporate America.

As the push to expand ESOPs gains momentum, advocates hope it will eventually reshape the future of work, creating stronger companies and a stronger society along the way.