Since we founded Klein Hersh in 1998, my partners and I have dedicated ourselves to building a culture steeped in family values, a strong work ethic, a collaborative spirit, world-class service, and the development of long-term relationships with clients and team members alike. Our firm has grown slowly and methodically over the years to become a global leader in executive search for the life sciences and healthcare industry. We’re enormously proud of what we’ve achieved, but most of all, we’re proud of how we got here.
A few years back, our leadership team began talking about how to ensure all that we’ve created together could stand strong well into the future. How would we faithfully honor the firm’s legacy, sustain our extraordinary culture and values, enable the entire Klein Hersh team to collectively share in the responsibility as well as the wealth generated by our success, and remain an independent entity? We found the perfect solution.
In April 2022, we introduced an Employee Stock Ownership Plan (ESOP). Klein Hersh is now 100 percent-owned by our team.
A Wealth of Benefits
To create an ESOP, a company’s original owners sell all or some of their shares to an ESOP trust, which holds those shares for distribution to employees upon retirement or departure. Employees accumulate shares over the duration of their tenure, creating value that grows based on the company’s success.
Beyond our matching 401(k) plan, Klein Hersh is now contributing directly to our team’s retirement accounts through our ESOP. And ESOP account growth is not dependent upon investments in a volatile stock market, but rather, based on the success of our firm. In fact, research shows employees at ESOP companies have 2.5 times greater retirement accounts than equivalent employees elsewhere.
It’s always been imperative to us that Klein Hersh represents an exceptional place to work for our talented team as they build successful careers they feel passionate about. And we’re thrilled our team will now reap even greater benefits from their own stake in the firm’s success.
The benefits abound for our clients as well. Data shows that ESOP ownership increases business performance across numerous categories, including productivity. Our clients can rest assured they will receive the high level of service they’re accustomed to from Klein Hersh for countless years to come, without any concern about changes in ownership, focus, structure, or how we conduct business.
Our Next Chapter
While creating an ESOP reflects a “change in ownership” for any company, at Klein Hersh, nothing else is changing. I remain as CEO, and the entirety of the firm’s leadership team remains intact. None of us are going anywhere. And our day-to-day operations remain unchanged as well.
And while the introduction of an ESOP at most companies leads to greater engagement among employees, we honestly can’t imagine our dedicated team of subject matter experts―with an average tenure of 12 years at Klein Hersh among them―being any more engaged than they already are. That said, an ESOP does mean long-term career and company stability, enhanced incentive to contribute to the company’s success, and greater reward for those contributions.
For me and my partners, our ESOP represents a succession plan that will not only directly benefit team members and the health of the firm long-term, it will enable us to preserve the culture, vision, core principles, and values that have guided Klein Hersh since its inception. It allows our growth to continue on a strategic and organic pathway, not a trajectory based on revenue-driven plans and formulas typically imposed by outside ownership. For us, maintaining our culture and honoring our legacy are what matters most.
Taking Care of Our Own
From the perspective of our leadership team, the firm’s employees have never worked for us. They work with us. And we take care of our own. Always have. Always will. Now, this philosophy is fully reflected through shared ownership.
We couldn’t be more excited about our newly minted succession plan. We know Klein Hersh is in the best possible hands with our next generation of owners, who are now able to share in the wealth they create. Together, we’re protecting all that we’ve built and continue to build. We’re making our company even stronger. We’re investing in our own future more than ever before. And that future, for all of us, looks very promising.
About the Author
Jason Hersh is Chief Executive Officer, Managing Partner, and Co-founder of Klein Hersh International―a global leader in strategic leadership placement solutions for the life sciences and healthcare industry. He is responsible for managing strategic growth, organizational culture, and career development across the firm. Since the establishment of Klein Hersh in 1998, Jason has been instrumental in building it into one of the largest life sciences executive search firms in the world, and more specifically, the world’s largest single site recruitment firm when measured by revenue and placements.