The Illinois Center for Employee Ownership (ILCEO) is a nonprofit organization that serves as the statewide resource for education, guidance, and support on employee ownership.

Employee ownership is a business model where employees hold a meaningful stake in the company they work for—sharing in its success and growth.

Common forms include:

ESOPs (Employee Stock Ownership Plans)

Worker Cooperatives

Employee Ownership Trusts (EOTs)

This approach helps business owners plan successful transitions, employees build wealth, and communities keep local businesses and jobs thriving.

There are more than 280 employee-owned companies in Illinois, representing over 70,000 employee-owners and about $10 billion in total plan assets.

These companies span industries from manufacturing and construction to professional services and food production, and most are small to mid-sized businesses that help keep jobs and wealth local.

The three most common or popular types of employee ownership are:

1. Employee Stock Ownership Plans (ESOPs).

2. Worker-Owned Cooperatives (WOCs).

3. Employee Ownership Trusts (EOTs).

ESOPs are retirement plans, somewhat like 401(k)s, except the invested dollars all go into the company where employees work. More importantly, like a 401(k), an ESOP is tax-advantaged. For an S Corporation, whatever portion of the company is owned by the ESOP pays no federal or state corporate income tax.

An EOT is a trust that is created to own the shares of a company. The primary purpose of an EOT is to run a company on behalf of the organization’s employees. The EOT also owns the company’s shares perpetually and cannot be sold.

A WOC is a values-driven business that is owned and managed by its workers. Worker cooperatives are based on the idea that employees should benefit from their labor and have a say in how the business is run. Profits not retained for growth are also distributed evenly among employee-owners.

For business owners, the primary benefits of considering employee ownership include increased employee engagement and productivity, reduced employee turnover, an enhanced company culture, potential for increased profitability, successful succession planning, tax advantages, and improved community perception, which all stem from employees having a direct stake in the company's success and working harder to achieve shared goals. 

According to the National Center for Employee Ownership (NCEO), employee owners earn 5–12% higher wages, have 2.5 times greater retirement savings, face a lower risk of job loss, and report higher job satisfaction and engagement than employees at traditionally owned firms.

Employee ownership works well for profitable companies across many industries—especially manufacturing, construction, professional services, and transportation. Businesses with 5 or more employees and a track record of consistent earnings are strong candidates for ESOPs, cooperatives, or Employee Ownership Trusts.

Employee ownership helps business owners secure their legacy and strengthen their company’s future. It leads to higher engagement, productivity, and profitability, along with lower turnover and a stronger culture. Owners also gain flexible succession options, valuable tax advantages, and a positive community reputation—all while keeping their business locally rooted.

The process of transitioning a company to employee ownership can take anywhere from a few months to a couple of years. The most common timeframe is 6 to 12 months, depending on the complexity of the company and the level of preparation involved. Some transitions might be completed faster with expert guidance, while others may take longer due to intricate legal and financial considerations. 

Employee ownership is gaining momentum because it solves key challenges for businesses, workers, and communities.

As baby boomer owners retire, it offers a fair, flexible succession path that keeps companies local. Employee-owned businesses see stronger performance, higher retention, and greater employee engagement, while giving workers a real stake in success and helping build community wealth.

In short, it helps owners retire confidently, employees build wealth, and communities thrive.

ILCEO provides free, unbiased guidance to help business owners explore and implement employee ownership. We educate companies on ESOPs, cooperatives, and EOTs, assess readiness, and connect owners with trusted legal and financial experts to design a smooth, successful transition that protects their legacy and keeps jobs local.

ILCEO is a nonprofit organization funded through grants, partnerships, and contributions from individuals, foundations, and employee-owned companies that support expanding employee ownership in Illinois.