Acquiring talent: does ownership help?

Purpose The study examines individual- and firm-level factors that influence the likelihood of receiving an ownership stake in the firm during recruitment. Design/methodology/approach We employ a logistic regression model to identify factors associated with the likelihood of acquiring an ownership share in the year of recruitment. We use unique linked owner–employer–employee data from Finland for the years 2007–2019. In addition to traditional individual-level characteristics, we control for previous employment in high-productivity firms and a wide array of variables related to the current firm. Findings The results suggest that ownership is used to attract a skilled workforce and sometimes to compensate for less competitive salaries. Ownership is offered during recruitment to a narrow group of individuals, typically highly educated, by small and young startup firms operating in the knowledge-intensive service sector. The firms are also often growing rapidly. The owner-employees, currently working as managers or professionals, have previously worked in high-productivity firms, thus enabling inter-firm knowledge transfer. They also appear to be more risk tolerant than employees in general. Originality/value This study is one of the first to provide empirical evidence on individual-targeted employee ownership offers. Most previous studies have examined broad-based employee stock ownership plans and utilised survey data. Our study uses rich registry data instead.