Companies big and small are looking for ways to build morale, develop the next generation of leaders, and keep people invested for the long run. That's why we sat down with Laura Mueller, chief human resources officer at Groundworks, a foundation repair and water management company, to hear how and why the company set up an automatic employee ownership program for its nearly 7,000 workers. There's no buy-in, and employees are enrolled after working with the company for six months.

Listen in to see how the program is faring, and what you might take away for your own firm.

Welcome back to Women at WIRC, where our editors from sister media brands Pro Builder, Pro Remodeler, and Custom Builder sit down with standout women across home building, remodeling, and design. We'll share their stories, their business insights, and explore how women are reshaping the residential building industry

Pauline Hammerbeck: Hi, I'm Pauline Hammerbeck, head of content at Custom Builder. Today's conversation is about a workforce experiment much of the construction industry is watching, and that's employee ownership.

My guest is Laura Mueller, chief human resources officer at Groundworks, North America's largest foundation repair and water management company. Laura leads people strategy for roughly 7,000 employees across the U.S. and Canada, and this past January, Groundworks distributed about 31 million to nearly 5,000 employee owners.

Laura, welcome to the show.

Laura Mueller: Thank you, Pauline. Happy to be here.

Pauline: Well, before Groundworks, I know you spent more than 25 years in HR for various companies, including Convergint Technologies, where you oversaw HR for 10,000-plus employees in many different countries.

But that was more of a commercial and industrial world. So when you arrived at Groundworks ... what struck you about the workforce challenges here that maybe you hadn't seen before?

Laura: You know, the workforce challenges here are definitely indicative of the industry in general, when we're looking at going into people's homes and doing construction.

And that's just scarcity of labor. You know, finding the talent, finding the—to be honest with you, the personalities that fit in our organization. We are an employee-owned organization. We are a company that is based in how everyone puts their boots on the same way, and that's incredibly important to us.

And, with our growth, with the promotion rate that we have, we need people that will join us, not just looking necessarily for a job for now. We're really looking for people who [want] to do something with their careers, do something with their lives, want to get promoted, want to keep coming up in the organization.

And finding people who are willing to put those boots on, get under a house, do the work, and earn those promotions is where I think we really probably struggle the most ... it's finding that type of person that really wants to dig into their career, into the job.

Pauline: And was that fundamentally different than some of the other industries that you came from?

Laura: Yeah, because when we look at our entry-level installers, these are our teammates who are really crawling under homes, digging out concrete. These are not easy jobs. These are very difficult jobs. A lot of industry that I've come from has been much more on the technical side ... computer programming, and they come in with years of experience and they're not looking necessarily for that entry-level job.

It's a very different profile here. And so the industry definitely, obviously, as you said, is facing that labor shortage problem and, you know, different companies have thrown a lot of different programs, you know, as potential solutions.

Pauline: There are apprenticeship programs, sometimes signing bonuses. From where you sit now, what's your thought what's working, and what's mostly busy work? What's effective?

Laura: You know, I don't find signing bonuses particularly effective. I think that's addressing the here and now, the short term, someone who's just looking for that. I think where we really find success is... and I want to make sure we're really clear with the employee ownership. The employee ownership was not a gimmick that was done to try to recruit new people, and keep people.

It's definitely a byproduct of it. But really the employee ownership was born out of [Groundworks founder and CEO] Matt Malone's desire to make sure that, if we're going to have people come in and work as hard as we need to work to grow this organization, everyone should be able to participate in that growth.

And just as much as we all put our boots on the same way, we should all get to share in the growth of the organization.

Now, the great byproduct of it is [that it is] a great recruiting tool, to tell someone that within six months of your start date you're going to have ownership in this organization. To be able to say to our workforce, "When you make decisions, you should be making them as an owner would. Would an owner spend the money on that product or would they go look for something else? Would the owner leave a job looking like that or would an owner take it a step further and, and, and finish that?"

I think that's the real byproduct of employee ownership and having that built out. But it really came from a desire for not only Matt but KKR, who is our private equity partner. It's something that they believe very strongly in and believe that it should not be just a few people at the top of an organization that gets to benefit from the growth that the rest of the organization helps build for the future.

Pauline: So was the program already in place when you came on board?

Laura: Yes. The program actually was launched in 2023 when Matt partnered with KKR.

Pauline: And so when you came on board, how did you see this piece as part of the broader puzzle? You're sort of touching on it here, but maybe you can tell us a little bit more about where it fits in as an overall kind of employee strategy.

Laura: As an employee strategy, obviously we build in employee ownership with our recruiting tools. We build it in with our annual engagement surveys. We build it into our training programs.

We recently launched our branch management and training program, Jan. 1 of this year, and that program really expands across all the management roles within our branches and bringing in new talent from outside the industry.

Our growth trajectory is so large that we can't simply find enough people that come from the industry and have industry knowledge. We need to grow our own leaders. And so we had to launch a program to be able to do that, and that program is built around employee ownership and what that means to the individuals.

And, as you had mentioned, earlier this year we paid out over $31 million. That was what we called a dividend. That's not the employee ownership portion. It is, because it obviously builds into that, but that was what we called a dividend. That was where we said, "Listen, this is not the payout.This is not what we would hope would be the end game."

We are performing as an organization, and we are performing so well as an organization, and we have this cash on hand that we want to share with our owners as any public company would do, where they would pay out a dividend to their stockholders.

We wanted to take it a step further and say, "We're going to go ahead and pay out as if it were a dividend," and then all of our employees get to share in that. And so that's what that payment was. That was not the necessarily ownership piece of it that when a company maybe has a transaction in the future, you see payouts as typical.

This was simply that we're performing as an organization, and we want to share with our owners in that performance.

Pauline: I love that. Maybe we can back up, and just tell me a little bit about how the program actually works. Who's eligible, when are they eligible and maybe even along the lines of these dividends, are these on a potential set schedule, or are they sort of surprises? Just kind of give me a good overview of the program itself.

Laura: Sure. So an employee becomes eligible after six months with Groundworks. So you come to Groundworks, you're here for six months, you become an owner in the organization. Now, setting up these programs, I will tell you, is not an easy task, especially when you're talking about the amount of people that we have, when you talk about turnover that's going to happen naturally in an organization.

And so what we have is a program based on your years of service to the organization. So when our transaction happens, we will look at the total amount that we're able to have a transaction for, and we will divide that amongst the employees that have ownership, so six months or greater, and based on their length of service to the organization, and that's gonna determine what their payout is at time of transaction.

We can't estimate when that transaction's going to happen, right? These are things that happen over time, when the company hits certain thresholds, [it] depends on the market. And so we can't put exact numbers to it, but what we can say is that we're going to base it off years of service to the organization and based off their rate of pay, and we'll do a multiplier at that point of their base pay and calculate it that way.

Pauline: And so when you say transaction, do you mean when the private equity then moves forward and sells the company?

Laura: Correct.

Pauline: You're not saying certain benchmarks for revenue or anything like that.

Laura: Correct. And as far as dividend you asked about, that's not a set schedule. That was, to be honest with you, a great surprise for our employees. That's never been communicated that, hey, if we're doing great, we're going to have dividend payouts. That was something that Matt and KKR said, "Listen, this is where we are financially with the organization, and we need to share in this great wealth that this company has created, which means all of the men and women that work for our organization have created, and so they should get a piece of it as well."

Pauline: Tell me what that day was like when you guys announced that.

Laura: You know, I will tell you that, as an employee who gets to participate in it, as a manager that gets to communicate it, it's probably one of the best days you get as an employee and as a manager to be able to pick up the call... to pick up the phone, call every single one of your teammates that work within your group. So for me, people operations, I got to call every single person in my people ops group and say, you know, "Hey, this is what we're doing. This is why we're doing it, and this is how much the check will be coming up on Friday."

And, the excitement around it, the energy around it, the appreciation of the team, is really just ... you never get those, you don't get many of those days as a professional, especially on the HR side of the house. You don't get that many days like that, and they're fun days.

Pauline: And was that the first dividend since the 2023 establishment of the program?

Laura: Yes.

Pauline: So definitely a surprise, right?

Laura: Yes. It was a great surprise. 

Pauline: That's amazing. And so the program itself is structured so that employees don't need to buy into it, right? So the company sort of just grants it based on tenure if I'm understanding correctly.

Laura: That's correct. The employee doesn't have to buy in. It's simply a benefit that we provide to every employee that comes in.

Pauline: And why was it... I know you came on after the establishment of this program, but why was it important to structure it that way?

Laura: Um, you know, you have to look at the, the makeup of our employees. When people hear equity in a company ... you know, first off, a lot of people don't know what that means. They just know that CEOs get equity, and CEOs make lots of money and things like that. But what they don't see is a lot of times that CEO might have to actually buy into the company in order to get that equity, right?

And when we're talking about 7,400+ employees, and a lot of them are entry-level into the organization, we don't expect them to be able to buy into the organization. That's not something we were looking for. We were simply looking to build a program that gave ordinary people who are starting their career or continuing their career in an organization, they should be able to benefit from that organization just as much as anybody else within it.

Again, going back to everybody puts their boots on the same way.

Pauline: And so this is different from other programs that we've heard about, like an ESOP. This is different from that, correct?

Laura: That is correct, yes.

Pauline: Can you tell me a little bit about how it's maybe structurally different?

Laura: Well, because we don't have a set number of units per employee. We have to look at what the pool will be like when we actually have that transaction happen.

Pauline: And then obviously you're a very large organization, thousands of employees. You know, for many of our listeners, construction, it's very much obviously project-based. And most firms don't run 7,000 people. So does an ownership model like, like you have, does it need scale to work?

Laura: No. That's the beauty of it. When you're not looking at... and believe me, we have a lot of programs that are project-based, right? We have commission programs. We have, PPJ, which is a bonus that our installers and our co-foreman and our foreman get for each job. So we have a lot of project-based type of compensation pieces to it.

This is not that. The beauty of doing an ownership program like this and not making it an ESOP, and not making it overly complicated, is that you can do this at any scale. You don't have to be a large organization to do it. You don't have to be a small organization to do it. You can structure a benefit like this to everyone by simply structuring it in a way where it's across the board. It's a pool once the transaction happens, and then you can divide it from that pool.

It makes it a lot simpler to be able to administer it, and it makes it easier to ensure that all employees get to participate and that you don't run out of equity. I know a lot of companies think, "I've got equity. I've only got so much." And as the people come on board, they give out equity. They can run out of equity. In this case, it allows for everybody to participate in it.

Pauline: And then we talked about the dividend. You said this was your first such payout. How do you track the impact of something like that? Is it more just anecdotal? Are there metrics that you're watching? Referrals or retention, turnover lessened?

Laura: We, like any company, we monitor our turnover very closely. You know, why is there turnover? What's driving the turnover? What's good turnover? What's bad turnover? And so those are things that we are always monitoring anyways.

This program wasn't built as a program to help retention. It wasn't a program to drive down turnover. It was a program to share the wealth. So there were no statistics set up in the beginning. Now, as we've gotten more mature as an organization and certainly larger as an organization, now we start looking at a lot of trends, and we start looking at what can we do to drive down our turnover?

But the dividend was not meant to be any kind of tool except for to say that we wanted to share in the growth and the success of the organization.

Now, we will monitor how our turnover looks this year compared to last year and see if that did have an impact. Certainly we would wanna know that. But because that wasn't the intention of the program, it wasn't that we thought, "Let's put this on a schedule. If we see turnover driving one way or the other, we might release, you know, something else." It really wasn't that. It was a ... the company is successful, the company should share in its success.

Pauline: Even going back to the workforce problem, since we have the HR professional with us, and everybody struggles with this, but ownership could be a piece of that. Tell me, what else is on your priority list that you think is effective. You mentioned some of the programs earlier, but give us your priority list about what other companies might focus on to help solve that problem.

Laura: I think that, when people come to work, everybody comes to work and they want to do a good job. They want to go to work. They want to earn their living. They want to walk away at the end of the day and feel like they've accomplished something. And that's one of the things that I think we're going to see a trend towards, that we're counting on to be honest with you, that when our teams come together and they go out in their trucks in the morning and the crew goes out and they work on a house and they see the result at the end of the day, they literally can see and physically view what they've done to that house and they can walk away at the end of the day knowing that they've done this... they've done something where they've protected the greatest investment that most families have, which is their home.

And they've gone in and they've fixed a problem, and they've helped protect it for the long run. I think that goes a really long way. And so I think we're gonna start seeing a trend of people moving more towards trade.

We're going to see people starting to balance the cost of a college education versing the cost of maybe not going to college and going into a trade. You know, if we have somebody come in as an installer, if they come in, they work hard, the possibility is there that we see those installers turn into foremen within one year.

So if you're gonna move up in this organization, it's about a year to move from an installer to a co-foreman to a foreman. At a foreman role, you're making on average about $92,000 a year. You're almost at six figures within one year of starting with this organization. When you start weighing that against a college education and starting salaries and, you know, we hear a lot about AI. [And] we are also using AI for certain things in our back office and what that's going to do to the job market in the future. I think it's got a lot of people rethinking how they're going to enter the job market and whether or not a college degree is really the path that they should go. 

And we celebrate a lot of our promotions and how we promote people from within. We've probably had I think it's over 5,000 promotions since we've started this company over the years. Our COO, Jeffrey Martin, our chief operating officer, started as an installer, and he has worked his way up through the organization. That is something we promote quite a bit, and that's why we created the branch management and training program as well, because it's allowing us to pull people in from outside the industry and grow our own leaders in the future.

And, you know, I'm a big believer of, you were a great installer, you were a great co-foreman, now you're a foreman. Now we've moved you into a production manager position. You're getting ready to move into a general manager position. [But] just because you could do your job really well and you've gotten promoted doesn't necessarily mean you know how to read a P&L statement, [you] doesn't necessarily know how to get up and be an effective communicator. It doesn't mean you know how to conduct a great performance review so that you can build your team better. And so we have to teach them this, and this is why we built out the program that we've built, because not only do we have to teach you the industry, but as you move up in your career, you have to learn the skills that you need to be great leader of the next generation of employees that are coming in.

And so this program has been something that I've really focused on because we know that we're going to need that many leaders in the future. We know we've committed to 5,000 new skilled trade jobs over the next five years. We know that this is something that we've got to build. We have to have leaders to be able to lead it. And so we spend a lot of time focused on building those future leaders and promoting from within

Pauline: I was gonna ask you about that 5,000 number of new skilled trades jobs. You had mentioned that you think, going forward, people are gonna be rethinking the trades and college and sort of the dynamics there. Are you already starting to see that, or is that something that maybe you think is still, you know, a year or two out as AI and all these other issues kinda take bigger prominence?

Laura: I think we're gonna see more activity over the next year or two. I definitely think with the conversation around AI and the conversation around the cost of education now ... I've got a couple of kids in college right now, and I will tell you it's not an inexpensive venture. And I think there's a lot of people out there who are, are starting to say, "Is it really worth it?" I know my kids are starting to question, "Is it really worth it?"

And when you look at the jobs that are out there, especially in the skilled trade area, we see a lot of benefit to looking at those alternatives and looking to see what else is out there.

And quite certainly when you look at a company like Groundworks and the leaders that we have here and how they started their career versus where they sit now, you definitely can see where going the route of skilled trade has got its real benefits. We're just hearing it more and more.

Pauline: So we love to hear it, right? We have a problem, and it looks like the solution is headed our way, so things are looking up for the industry. Well, this is really an interesting program, and we've heard various, over the years, various forms of getting employees to buy into the organization or to benefit from the organization and loved hearing about yours as well.

Anything else you want to touch on that we didn't cover?

Laura: You know, one of the things I think we'd like to see a lot more of, especially here at Groundworks, is going to be finding more people coming out of military looking for that transitional role that they're going to take on. Obviously, we've talked a lot about people maybe not going into the college route, but going into more of the skilled trade route. We'd like to see more women entering the workforce, the skilled trade workforce. And, quite honestly, our BMIT program, that Branch Management In Training program, is geared towards attracting more women into our industry so that we have more diversification of knowledge and background and skills and education and everything that that brings.

Because, historically, construction is not attracted a lot of women into the industry. And, we see a big gap there that we can take advantage of as we're looking for more future leaders within our organization. So that's obviously something that we focus quite a bit on as well.

Pauline: Are you partnering with any other organizations in those recruiting efforts?

Laura: We do. We partner with several organizations to be able to do that, especially on the military side. There are a lot of organizations out there that support our military transitioning back into civilian work and civilian life. We also partnership with Echelon Front for our leadership training. That is a big piece of our leadership training. And with Echelon Front, we even work on their women's leadership calls. So we have monthly meetings with the women within the organization to partner with this world-class leadership education group and really just building up that workforce.

So we have partnerships throughout the U.S. and Canada that we take advantage of.

Pauline: Excellent. Well, so glad to hear it. Laura, thank you for joining us today. We really appreciate you.

Laura: Thank you. I appreciate you having me on.

Thanks for listening to Women at WIRC. This podcast is actually a spinoff of our annual Women in Residential Construction Conference, which we've been hosting since 2016. You can learn more about the conference and see when we'll be in your area by visiting womensconstructionconference.com. Women at WIRC is a production of Endeavor Business Media, a division of Endeavor B2B. Until next time, keep up the good work.