One full distribution cycle has passed since Jay Hardy sold Hardy Diagnostics, a medical device manufacturer located in Santa Maria, to its employees. For people not in the know, that’s about a year’s worth of time.
Hardy Diagnostics specializes in selling culture media, the solid or liquid vessel in which bacteria or fungi can be grown, such as a petri dish or tube. Its clients include businesses that test for such organisms, such as hospitals, doctors, food safety agencies, water districts, university research labs, and pharmaceutical companies.
When a corporation creates an Employee Stock Ownership Plan (ESOP), the founder distributes his or her stock to the corporation’s employees at no cost. The amount each employee receives is relative to his or her earnings.
When Michael Welch, HR manager for the company, interviewed for his position with Hardy in 2008, Hardy’s goal for employee ownership was already in place.
“Jay already knew back then that he wanted to eventually sell the company to his employees,” Welch said. “From everything he had gathered, he felt it was the best way for him to ensure that everything continues on as it should.”
Hardy feared that selling to a competitor would result in resource consolidation, employee layoffs during a recession, or even total closure of the business.
“He didn’t want any of that to happen,” Welch said. “Jay wanted this to keep going after he wasn’t working there anymore, and he thought [employee ownership] was the best way of achieving that.”
However, this isn’t to say that Hardy plans to retire in the near future.
“Jay is a die-with-his-boots-on kind of guy,” Welch said. “He really loves the company.”
In a release to the media, Hardy said, “Owning Hardy Diagnostics has been tremendously rewarding for me. Now everyone at Hardy Diagnostics can share in the joy and rewards of ownership, just as I have.”
The hope is that, every year, the company will continue to grow and be profitable, and as a result, the stock price will rise. The second employee distribution is nearly four to six weeks away, and Welch continues to have high expectations.
“From one year to the next, the number of shares held as an employee will rise,” he said. “It’s definitely a benefit to the system.”
Even before the company implemented the ESOP, Hardy Diagnostics used an Open Book Management system, encouraging employees to be more involved and take initiative.
“We literally have the books and financials open to everyone,” Welch said. “The mentality has always been about making each individual know that they are empowered to make things better.”
Because Hardy Diagnostics has profit-sharing, stronger profits mean there is a larger amount of money distributed to employees every quarter.
“Everything that’s good for the company is good for the employee,” he said. “It only seemed logical that the ESOP was the next step for us.”
For Welch, it’s clear that employees are becoming aware that they really do have the ability to effect change.
“Whatever it is that our employees are doing for their job here, they know we expect them to participate and be engaged,” he said. “The basis of ownership culture is to bring ideas forward, implement them, and make a difference.”
Employees at Hardy Diagnostics are hired and trained for not only the position that needs to be filled, but also for what they think they are most qualified.
“We try to make this a place where people get to do whatever they do best,” Welch said. “We work hard at finding applicants that really want to be here and offer a lot of training for them based on that.”
This is the original sentiment Hardy has worked so hard to pass down to his employees.
“A company made of hundreds of owners who really care about their work is a powerful, if not unbeatable, force in the marketplace,” Hardy said in the press release. “I get a great deal of satisfaction, when an employee tells me that they actually look forward to coming to work each day.”
Hardy Diagnostics is located at 1430 W. McCoy Lane in Santa Maria.
Intern Dora Saltzman wrote this week’s Biz Spotlight. Information should be sent to the Sun via fax, email, or mail.
This article appears in Mar 6-13, 2014.