At Cargas, a culture of shared capitalism
While Beatlemania rocked the world, a man landed on the moon and business boomed for the Big Three U.S. automakers, the early seeds of Cargas Systems' company culture took root in Chip Cargas' mind.
The decade inspired an unconventional juxtaposition that prompted Cargas to build the type of company he always wanted to work for, one that mushed together ‘power to the people’ and capitalism.
“All of my high school and college years were in the 1960s, and that really impacted my thinking,” said Cargas, chairman and CEO of the Lancaster-based business software and consulting firm.
“I realized that capitalism doesn’t need to be only for the few getting great rewards approach,” he said. “Capitalism can be very broad and very accessible to everybody, if you make it that way. We’ve figured out a way to make it that way.”
In its 29 years, the company has grown from a lone Cargas sitting behind a Macintosh SE in the corner of his and his wife’s bedroom, to 100 employees, including two summer interns, with offices in Lancaster and Pittsburgh.
Cargas started his business with a clear concept of what he wanted.
“My number one thing was I wanted to create the kind of company I wanted to work for,” he said. “I really wanted to create a company where people loved to come to work, worked together as a very collaborative team, where they’re in the thick of the action. They’re an integral part of the company and very focused on providing great value to our customers. And then to the degree we’re successful, we share that success broadly and generously.”
He had a technical background in engineering and a “people background” after working in human resources for a company of several hundred people. The duality proved useful in implementing programs that support his ‘power to the people’ and capitalism vision.
He cites competitive salaries, a profit-sharing plan, a bonus plan and employee ownership, open to all employees, as what’s worked well for Cargas in recruitment and retention. They allow employees to share in the company’s success.
The profit-sharing plan is “broad-based, very egalitarian and it’s all math,” he said.
“It has no management discretion whatsoever,” he said. “It has nothing to do with what your job title is or how much money you make in your salary. We accrue 20 percent of pre-tax profits and whatever is in there at the end of every half-year, we distribute it out in cash and half of it gets allocated by years of service and half equally. If you’ve been here a long time, that can be meaningful money.”
The bonus plan focuses on employees that are “key drivers of success,” whether they’re leaders or doers on the team.
The employee ownership program is designed to be easy and accessible. Cargas said the company tries to keep the minimum purchase low and offer payroll deductions to help participants save money for it. As of the last stock purchase opportunity, 73 percent of employees are owners, he said.
Recharging the batteries
Perhaps the most rewarding incentive for working at Cargas Systems doesn’t come in the form of financial investment or payment, though. It’s the sabbatical program.
“Ah, it’s fun,” Cargas, his eyes lighting up at its mention.
Employees are eligible for a four-week sabbatical every seven years. Cargas has taken three.
“This whole thing got started in the thick of trying to grow a young business with the usual challenges,” he said. “I kind of needed a break at some point.”
His coworkers convinced him to take a few weeks off, and after that it became a formalized program. Cargas said at least 50 sabbaticals have been taken during the company’s lifetime.
For Fred Bowers, manager of the product development team, the sabbatical program was an opportunity to take a honeymoon in Europe. His wife, a school teacher, had the summer off, so they jetted off to Europe. They visited Barcelona, Athens, Madrid, three Greek islands and Paris.
The sabbatical came at the perfect time for Bowers.
“I’ve been on the energy business for pretty much my whole tenure here, and there have been times that I felt we had been balancing on the edge of a blade,” he said. “The stress really gets ratcheted up.”
The trip allowed him to take a step back, reevaluate what he did at Cargas and approach the work with a fresh perspective.
“And that’s not all just lip service,” he said. “It was a big deal for me at the time.”
By the end of his trip, Bowers didn’t dread returning to the office.
“I remember sitting on the curb in Mykonos, 20 days in ... and I remember sitting there, halfway around the world and saying to myself, ‘I’m ready to go back to work now,’” he said.
Sandy Folts, a human resources employee for 20 years, has taken two sabbaticals. Her first coincided with the birth of her daughter, Isabella, giving her an extra month to relish the start of motherhood. Her second was a stay-cation, during which she reveled in summer activities with her daughter, including trips to Gettysburg and Hersheypark and time spent poolside.
What made the sabbatical extra meaningful was that, a week in, she learned the family pit bull, Buffy, named for the fictional vampire slayer, had cancer and only a few weeks to live.
“It was just a blessing to be able to spend the last couple weeks with our dog,” she said.
During his sabbaticals, Cargas has tried his best to disconnect from work, a practice that can benefit both employee and company.
“When the batteries are recharged,” he said, “You think of more ideas.”