New 500k pilot to expand employee ownership opportunities

LEO aims to preserve local businesses, empower workers and strengthen Michigan’s economy

LANSING, MI – The Michigan Department of Labor and Economic Opportunity (LEO), in partnership with the Michigan Center for Employee Ownership (MICEO), has launched a new $500,000 pilot program designed to expand access to employee ownership for Michigan’s businesses and workers. This initiative comes at a critical time as the state — and nation — grapples with a wave of impending business owner retirements and succession challenges. 

“Employee ownership is a powerful tool for preserving local businesses, empowering workers and building a more resilient economy,” said Lt. Governor Garlin Gilchrist II. “This investment is about keeping jobs in Michigan communities and giving workers a real stake in the future of the businesses they help build every day. Let’s keep Standing Tall for workers and small business in Michigan.” 

Employee ownership — where workers gain an ownership stake in the company, often through stock or equity — not only secures the legacy of local businesses but also creates a pathway for wealth building and job security for employees. This approach is increasingly seen as a solution to a pressing issue: 

• Nationwide, 75% of business owners plan to exit within the next 10 years (Exit Planning Institute) 

• Only 34% have a documented and communicated succession plan (PwC) 

• Fewer than one-third of business owners successfully sell their companies (Forbes) 

“Investing in employee ownership is an investment in the long-term success of Michigan’s businesses, workers, and economy,” said Susan Corbin, LEO Director. “These programs help companies remain locally owned, empower hardworking people with a real stake in their workplace, and build wealth in communities across our state. It’s a smart strategy that drives stronger business performance, greater job satisfaction, and a more resilient Michigan economy.” 

With thousands of Michigan business owners nearing retirement without an exit plan, the Transition to Employee Ownership Pilot Program offers a timely solution. By transitioning to employee ownership, businesses create their own buyers — preserving jobs, community roots and operational continuity. 

“This pilot program will help Michigan business owners become aware of the possibility of transitioning their ownership to their employees and help them determine if employee ownership could be a viable path forward,” said Roy Messing, Executive Director for MICEO. “If so, qualifying businesses can access valuable resources to explore and successfully execute this ownership exit strategy.” 

Program Details and Impact 

The new pilot program will be administered by MICEO, a nonprofit dedicated to advancing employee ownership across Michigan. With Grand Rapids already ranking 12th in the nation for employee-owned businesses, Michigan is well positioned to lead the country in adopting this proven model. 

Under the program: 

• $400,000 will go directly to support businesses transitioning to employee ownership— covering financial evaluations, legal services, and technical assistance. 

• MICEO will lead program administration and marketing, coordinate outreach and raising statewide awareness. 

• The program will also fund professional services support, including feasibility studies and legal guidance. 

• MICEO will develop best practices for Employee Ownership Trusts (EOTs) — a growing model for business succession that ensures long-term employee control. 

“An important piece for growing Michigan is intentionally ensuring that our long-standing businesses continue in the communities in which they operate,” said Sean Egan, LEO’s Deputy Director of Labor. “Baby boomers own roughly half of all Michigan businesses, and to ensure these businesses stay in our communities, we believe transitions to employee ownership are the best path forward.” 

The Benefits of Employee Ownership 

Data shows that employee ownership isn't just a succession strategy — it’s a smart economic development tool: 

• Higher performance: Employee-owned firms report increased sales, productivity and profitability. 

• Better jobs: Employee-owners earn 33% more in wages, have greater access to benefits and receive more employer-sponsored training. 

• More resilient businesses: These companies are half as likely to go bankrupt and are more likely to survive through economic shocks. 

• Stronger communities: Employee ownership reduces income inequality and racial wealth gaps — workers of color in employee-owned businesses earn 30% more and have 79% higher household wealth than their peers. 

The Small Business Association of Michigan (SBAM) applauds the launch of the Transition to Employee Ownership Pilot Program and sees it as a strategic solution to one of the most pressing challenges facing small businesses today. As many long-standing business owners approach retirement without a clear succession plan, SBAM recognizes employee ownership as a powerful pathway to preserve businesses, protect jobs and retain local economic value. 

“Small business owners spend a lifetime building tremendous value — not just in their companies, but in the communities they serve. Locally owned and controlled businesses create jobs, drive innovation and strengthen the places we call home,” said Brian Calley, President & CEO of the Small Business Association of Michigan.  

Looking Ahead 

With support from recent federal initiatives like the WORK Act and SSBCI, which include provisions for employee ownership, Michigan’s pilot program is both timely and well-aligned with national priorities. LEO, MICEO and a broad coalition of stakeholders will work together to ensure a successful and impactful rollout across the state. 

To learn more about employee ownership opportunities in Michigan, visit the MICEO website.