Kansas City is an employee-owner town. Washington can boost that | Opinion

There are cities where employee ownership is a novelty. Kansas City is not one of them. When Henderson Engineers’ leadership asked our ownership group whether we should become an employee-owned company, I had just become a principal. I had bought into the firm, felt the weight of what that meant and immediately understood what it would mean for everyone else.

What made it feel obvious had less to do with the financial mechanics and more to do with where we were. Henderson is headquartered in Lenexa, with offices in the Crossroads Arts District. And in this metropolitan area, employee ownership is not a novel idea — it is part of the culture.

Kansas City’s relationship with employee ownership goes back nearly four decades. In 1985, Burns & McDonnell was on the verge of being sold to a foreign buyer. A 10-person management team refused to let it happen. They bought the company themselves through an employee stock ownership plan or ESOP in 1986, kept it in Kansas City, and built it into one of the largest employee-owned firms in the country. That decision planted a seed. The idea spread through a tight-knit business community that talks to each other, shares what works and does not let good ideas stay in one building.

Today, the Kansas City area is home to nearly 80 employee-owned companies employing more than 65,000 workers on both sides of the state line, according to the latest data from the Department of Labor. Henderson, which became an ESOP in 2021 after 50 years in business, is among the newest. The ecosystem that started with one management team’s refusal to be sold now spans industries, ZIP codes and generations of employee-owners.

Understanding why KC became this kind of city requires looking at two interrelated factors.

The first is infrastructure. When a company here decides to explore employee ownership, it does not have to figure it out on its own. Banks in this market have made hundreds of these transactions. ESOP trustees are experienced and accessible. Advisers who specialize in these structures are embedded in the local business community. Leaders at local ESOP companies go out of their way to share their experiences. When Henderson’s leadership began its process, our ownership group read “Create Amazing,” where former Burns & McDonnell CEO Greg Graves tells the story of the company’s transition to an ESOP. We even had information sessions and Q&A conversations with architecture, engineering and construction peers and clients who had recently made the switch.

That is the infrastructure at work — not just banks and trustees, but a community of people who pick up the phone. After Henderson made the transition, I did exactly that: I connected a friend at another firm with our board chair. They had conversations, and that firm transitioned into an ESOP, too. The knowledge does not stay in one building here. It travels.

The second is culture. Research on employee ownership has found that ESOPs take root and survive at higher rates in communities built on trust, collective effort and mutual investment. That describes the Midwest and Kansas City perfectly. The ownership mindset asks people to think beyond their own role, to care about the firm’s health and to act as if the outcome belongs to them — because it does. That is not a hard sell here.

ESOPs retain workers, offer better retirements

What Henderson found after making the transition confirms what the broader research shows: Employee-owned companies nationally retain workers significantly longer than traditionally owned peers, and the retirement wealth gap between ESOP participants and the broader workforce is substantial.

When I joined Henderson 19 years ago, I did not know what an ESOP was. I came looking for a career and found a company that eventually made me an owner. When we voted to extend that to everyone in 2021, it felt less like a business decision and more like a continuation of something this city has been building for a long time. A new engineer who joins Henderson today will watch that play out in their own account. That is what Kansas City’s ownership culture actually looks like: not a headline, just a career — and the financial security that comes with it.

That financial security is something more workers should have access to. Bipartisan legislation such as the bipartisan Promotion and Expansion of Private Employee Ownership Act now under consideration in Washington, D.C., would make it easier for business owners to sell to their employees, expanding access to a structure this community has already proven works. Kansas City’s congressional delegation has an opportunity to champion something its constituents already understand, with Sens. Eric Schmitt and Roger Marshall as well as Reps. Emanuel Cleaver, Sharice Davids and Ron Estes all supporting the legislation.

We need to keep that momentum going. Reach out to your representatives in Congress and urge them to support employee-owned businesses, whether by backing pro-ESOP legislation or visiting an employee-owned company. The more lawmakers see what employee ownership makes possible, the closer we get to bringing it to communities nationwide.

Jen Jewers Bowlin is distribution and cold storage practice director at construction company Henderson Engineers.