Louis Kelso, a 20th-century political economist, once said, “What the economy needs is a way of legitimately getting capital ownership into the hands of the people who now don’t have it.” Hardy Diagnostics took a big step in getting more capital ownership into more hands by recently becoming 100 percent employee owned.

Companies with employee stock ownership plans are known as ESOPs, and they’re employees are granted real shares in the company at no cost to them. Employee account values grow by the annual addition of shares and by the increase in stock price.

“The Company’s growth rate was 16 percent last year, and in the last two years our stock price has increased 34.5 percent,” said Jay Hardy, the company’s president. “This is evidence of a highly dedicated and motivated workforce.”

Hardy Diagnostics’s ESOP was formed in 2012, when Jay Hardy sold 70 percent of his shares to the employees. The remaining 30 percent of shares were sold to the employees in August of last year, making Hardy Diagnostics completely employee owned. Since that time, $6.4 million have been deposited in participant accounts.

Christian Alduenda, a sales representative at Hardy Diagnostics, said, “The ESOP gives people working here a sense of ownership and pride. We know we own a business. Being part of the decision-making process drives us to want to work harder.”

As an employee-owned company, Hardy Diagnostics is not obligated to outside shareholders who care only about the bottom line, ensuring the freedom to emphasize other values, like community involvement, environmental responsibility and the wellness and satisfaction of the workforce as whole people.

“Our employee ownership program ensures the long-term viability of the company and eliminates the fear of Hardy Diagnostics being swallowed up by a larger conglomerate,” said Jay Hardy.

ESOPs generally have a superior track record compared to other companies, and they are 25 percent more likely to stay in business. ESOPs also have 25 percent higher job growth over the last 10 years compared to non-ESOPs.

Employees at ESOPs have retirement accounts that are two-and-a-half times greater than their non-ESOP counterparts, and they were four times less likely to be laid off during the recent recession.

Hardy Diagnostics’s ESOP also brings significant tax advantages which will make the company more competitive by allowing for increased investment in innovative products for future growth.

Jay Hardy plans to remain as president, and the current board of directors will continue to serve the company.

— Mike Welch represents Hardy Diagnostics.