b'ACCOUNTING COLUMNYOUR CONSTRUCTION COMPANY AND EMPLOYEESHARE OPTIONSWHAT HAPPENS WHEN THE EXPERIENCED OLD IS REPLACED BY A MORE DEMANDING NEW? BY EBEN LOUW AND BRIAN LAVECK, MNP LLPts no secret British Columbia constructionTHREE KEY QUESTIONS TO ASKAND ANSWERI companies are experiencing change at anFocus on solutions based on the answers to three distinct questions:unprecedented pacefuelled by (among other factors), changing building standards and bidding How do you share profits with your employees? processes, compressed margins and an aging workforce. How do you share more ownership and value with your employees?At the same time, a seismic demographic shift is taking place.How do you share future growth with your employees?Millennials will soon overtake baby boomers as the largest generation in the Canadian workforcewith qualities andThe answers to these questions will vary depending on the work styles that may differ from their predecessors. Thisbusiness and owners objectives, but foundational to any new generation is demanding a more collaborative, moresituation are a few key considerations:participative work environment, and it is expected that this trend will only continue. What are your objectives for a profit-sharing or employeeshare ownership plan (ESOP)? For example, are you In fact, the battle to attract and retain capable, motivatedattempting to attract new talent? Keep strong employees? peopleof any ageis a challenge, particularly in regionsTransition out of your business?where construction activity is robust. Add evolving building and environmental standards, applications of so-called smart I s your focus on sharing profits with your existing and future technology and the additional intricacies in acquiring contracts,employees? Or is it only on current employees?and you have an increasingly complex businessenvironment.Would you like to share profits with all your employees, or just a certain group? Some companies only want to share THE ROAD TO EMPLOYEE OWNERSHIP with their key employees, while others prefer to share with all MNPs Real Estate and Construction Advisors have noted atheir employees, and the reasons for doing so vary greatly.number of these growing concerns common to constructionHow closely should profit sharing be tied to corporate business owners, including questions such as: performance? Are the leaders willing to develop a profit- How can we retain our brightest and best people? Thesharing system that is closely tied to specific performance areas, or is the sharing more subjective? competition for talent in our industry is really intense right now, and I want to make sure that we are able to maintainIt is possible to combine these outcomes and develop a system strong bench strength. that answers all the questions, but any solution, no matter howWe would like to share some of our profits with our peoplecomplex or simple, should specifically address these questions. in a way that makes sensetied to the real performance of the company. How do we do this? TIPS FOR A SUCCESSFUL TRANSITIONWe need to develop more training time and invest in ourEmployee ownership programs can be autonomous or upcoming leaders to increase the likelihood of them stayingcombined with profit-sharing programs. Generally, they with us. allow for all or only certain qualified employees to become direct owners in the company. Critical factors which lead toAll of the goodwill in our business is in our people, andsuccessful ESOPs include: so its possible our employees could buy all or parts of theHaving a culture, or being willing to develop a culture, company one day. How do we do that in a way that makeswhereby decision making is decentralized and management sense, and we still retain control? is engaged.34 SOUTHERN INTERIOR CONSTRUCTION ASSOCIATION'