One Agency’s Move to Increase Retention

Stewart’s Ambulance Service, a privately-owned EMS and medical transportation company in New Hampshire and Maine, is aiming to be employee-owned by the end of 2023.

The company’s current owner is Transformative Healthcare, which will continue to have an investment in Stewart’s once the ownership transfer has been accomplished under federal Employee Stock Ownership Plan (ESOP) rules. According to Transformative Healthcare, an ESOP is a tax-exempt trust that allows employees to acquire ownership in their employers without investing their own money.

"EMS has been a critical and unsung health care hero of the past two years," said Justin Van Etten, executive chairman of Stewart's Ambulance Service. "Stewart’s move to employee ownership recognizes and values the sacrifices and professional excellence of our employees with both equity and voice.”

Driving Employee Retention

A 2022 American Ambulance Association (AAA)/Newton 360 study reported that the overall turnover rate for full-time and part-time EMS employees in America was 36%.

“In keeping with prior years' surveys, the primary reasons cited for turnover across all positions within EMS agencies is low pay and benefits, followed by a change in career,” stated an AAA article titled “4th Annual Study Shows Worsening EMS Turnover” at ambulance.org. Such turnover makes it difficult for EMS companies to fulfill their service commitments and maintain their quality of care, due to the disruption caused by losing experienced employees, according to the article.

One way to address the problem of high turnover is to give employees an ownership stake in their employer. When they become part-owners, employees receive a share of the profits and are motivated to build the company’s success through their own efforts. In the case of Stewart’s, EMS employees will receive their benefits in the form of company shares and dividends, which will be accumulated in their names until they either retire or resign.

“Employee-owned companies consistently have both higher employee engagement and greater job security,” stated the August 29, 2022 Transformative Healthcare news release that announced Stewart’s ESOP initiative. “Employee ownership also helps lower turnover, ensure continuity of high-quality service, and generate jobs and business value which stays local. Municipal partners, institutional partners and the general public all benefit from having a stronger EMS and medical transportation partner in the community.”                                         

How It Works

Since the point of employee ownership is to drive employee retention, admittance to Stewart’s employee ownership plan requires EMS staff to work a minimum of 1,000 hours in one calendar year.

“As soon as you hit the thousand hours’ mark, your admittance to our ESOP goes retroactive to your start date,” Van Etten said. “Now it takes six years to be fully vested with stock and benefits from the ESOP. So if you leave Stewart’s before the end of six years—unless your departure is due to death, disability, or you hit the retirement age—then you get a percentage of what you've built up.” The percentage scales up as the employee approaches their six-year mark.

“All full-time Stewart's employees will be eligible to participate, with stakes that increase with tenure and seniority,” stated the August 29, 2022 Transformative Healthcare news release. “As Stewart's continues hiring for significant growth opportunities, new full-time employees also may participate in the plan, adding to a range of benefits that includes scholarship funds, referral bonuses, and innovative programs that pay candidates while they train to become EMTs.”

A Reason to Stay

Joseph Alessandro serves as Stewart’s field manager for the Interstate 93 corridor. He is enthusiastic about his EMS agency’s employee ownership plan, and believes that such a move gives EMS professionals a reason to stay at the company—and to do the best job possible.

“Being at a traditional company with no ownership stake is like driving a rental car,” Alessandro said. “When it’s not yours, it doesn't really matter to you what happens to it. But when you own the car—or are part owner in a company like Stewart’s—there's pride in ownership, and you do care about what happens to it.”

So will giving Alessandro and other Stewart’s employees a stake in the company help retain existing EMTs and recruit new ones? “I would hope so,” he replied. “Unfortunately, time will tell. But I think giving us a stake will give Stewart’s a really good foundation in it. and I'm really hopeful that it'll attract and keep quality people. It's a promising way to go forward as EMS is struggling as an industry right now, trying to get back to normal after the pandemic.”

James Careless is a frequent contributor to EMS World.