Rhoads Energy fuels employee recruiting and retention by starting ESOP

Rhoads Energy announced Monday it’s giving a 25% stake in the company to its 160 employees, implementing a timely and potent program to help reward, retain and recruit workers.

CEO Mike DeBerdine, who owns the business with his family, said the maximum number of shares an employee can receive under its newly created employee stock ownership plan will be pegged to their salary.

Employees will get the shares according to a vesting schedule.

Employees are embracing the opportunity, DeBerdine said. He pointed to a Facebook post by an employee on Wednesday, a few hours after employees were told about the ESOP: “Yesterday, I was just a truck driver. Today I’m an owner-operator.”

Management began thinking about creating an ESOP and selling some of Rhoads' stock to the plan five years ago, but its advisers said Rhoads’ profits before interest, taxes, depreciation and amortization weren’t high enough. Now they are, according to the CEO.

The fact that employee ownership is becoming possible just as companies are aggressively seeking ways to make their workplaces more attractive, to help cope with an ongoing labor shortage, is “just a coincidence,” DeBerdine said. Companies are using a host of strategies, such as pay hikes and hiring bonuses, but few if any other companies in the county are rolling out ESOPs.

DeBerdine hopes the feature is a positive “differentiator” for Rhoads, as employee ownership is relatively rare among businesses. Within Rhoad’s business niche, only one other company in the region is employee-owned, he said.

Whether the size of the stake of Rhoads that’s earmarked for employee ownership gets increased in the future remains to be seen, DeBerdine said. He noted that the plan is too new to be making decisions about the future.

Rhoads is a Lancaster-based company that provides propane, natural gas, heating oil, diesel fuel and HVAC services to residential and commercial customers. Annual revenues were $67 million last year.

As seen in Lancaster Online and written by Tim Mekeel.