In the United States, more than 6 million small- and medium‑size businesses will see their owners retire between now and 2035, research by McKinsey says. That “silver tsunami” is driving a surge of ownership transfers in which the businesses are sold to the very people who run them.
Softstar Shoes in Oregon is the first example of this trend made public. In January 2024 the company’s founder, Tricia Salcido, sold the 30‑person shoe‑making operation to her staff through an Employee Ownership Trust. The trust holds the business on the employees’ behalf, removing the need for them to buy shares outright and allowing the company to continue operating without a sudden capital outlay.
Softstar Shoes’ transition illustrates several benefits that employee ownership can bring. Independent studies say that employee‑owned firms can gain an 8‑12% boost in productivity, pay higher wages, and are less likely to make staff redundant compared with non‑owned peers.
Data supports the growing trend: in 2025, up to 600 firms are reported to have been sold to workers, and investment funds dedicated to such deals rose 78% to $865 million from $500 million the previous year. The move also protects legacy businesses from being sold to large corporate buyers who might relocate production or cut jobs.
Different structures exist for wage‑earning owners. An Employee Stock Ownership Plan (ESOP) is the most common model in the United States, giving workers a share that can only be cashed when they leave. A worker co‑operative is another option, where each employee purchases a direct share of the company.
Harvard Business School professor Ethan Rouen explains that employee ownership appeals not just to older founders but also to younger workers who feel let‑down by traditional corporate hierarchies. By democratising capital ownership, employees can share in profits and influence direction.
The upside comes with timing and risk. Salcido’s trust will pay her the agreed price in instalments over ten years, which means she must trust the company’s future performance. The longer pay‑out period and the need for a complex legal set‑up may deter some owners, as the risk of delayed or reduced payment looms.
Nevertheless, the delay is eased by rising familiarity with the models. While the process remains somewhat opaque to many, initiatives from the U.S. Department of Labor’s Employee Ownership Initiative aim to simplify the legal framework and provide support and advice.
In the near term, it is expected that more small businesses will adopt employee ownership structures. Politicians have already expressed bipartisan support to streamline the process, and new finance channels are becoming available to fund these transitions.
