Benefits of employee-owned business seen in state’s numbers

Robert Whalen, president and CEO of HB Global, Harrisburg, said his company is has seen tremendous growth since becoming employee-owned 12 years ago. 

His company is one of the many that make Pennsylvania second in the nation for employee-owned companies, with Harrisburg and York cities ranking in the top 25. 

Robert Whalen

Certified Employee-Owned, an organization launched in 2017 to accelerate the creation of an employee-owned economy by providing certification for employee-owned businesses, said Harrisburg, which ranked third city in the nation, is home to 17 employee-owned companies, including HB Global, D&H Distributing, and Schaedler Yesco Distribution.  

With a population of 58,000, Harrisburg has one employee-owned company for every 3,400 residents, the company said. 

Kevin McPhillips, CEO of the Pennsylvania Center for Employee Ownership, said the picture is even brighter than that. Pennsylvania falls only behind California, which is 3.5 times larger, he said. 

McPhillips, who heads the volunteer organization to raise awareness about the benefits of employee ownership, said these companies change lives, offering people a real future. “When employees own stock, it makes the company more profitable,” he said.

Thomas Dudley, Certified Employee-Owned’s CEO, said, “We set out to create a list of the top cities for employee ownership because we want to shine a light on the cities that have fostered an environment where employee ownership thrives. We want to help people see which cities have clusters of employee-owned companies so that we can understand what’s driving their success.” 

While York ranked 24 on the list of cities in Certified Employee-Owned’s ranking, McPhillips said the picture is brighter than that. York County, he said, has some of the highest employee-owned companies per capita in the nation. “A lot of that is from the support of the York County Economic Alliance,” he said. 

Kevin McPhillips

Studies show that employees who have ownership in their company are eight to 12% more productive and they earn two to three times more retirement wealth, McPhillips said.  

Employee ownership changes the relationship between the company and employee, Dudley said. When every employee has an ownership stake, companies become rooted in place.  

“In 2010, we had a single location in Harrisburg. Now we have 10 divisions along the east coast, the Carribean and Phoenix, Arizona,” HB Global’s Whalen said. 

That computes to 20 times the revenue and 10 times the employees HB Global had when it changed to employee owned, Whalen said. 

“The ownership culture contributes to efficiency,” he said because employees take value in ownership.  

The company has grown through acquisitions and Whalen said all new employees are offered ownership on day one.  “We recognize length of service with their former owners and offer shares accordingly,” he said.  

“We believe employees should share in what we create,” Whalen said. “We believe over time they produce more, and we are a better company with better service because of it.” 

According to Certified Employee-Owned, the wealth these companies build flows through the local economy, the jobs they create are more stable, and they become more involved in service. 

 Because of these connections, employee ownership is a win for workers, businesses, and communities, the company said. Common examples include Employee Stock Ownership Plans (ESOPs), Worker Cooperatives, Employee Ownership Trusts (EOTs), and broad-based equity compensation plans such as stock options, Dudley said. 

McPhillips said an ESOP is a federal program where an owner can sell all or part of the company to employees. “The business takes a loan to pay the owner and then doesn’t pay taxes on the profits equal to the percentage of employees involved,” he said.  

“If you aren’t paying taxes, it creates cash flow which translates to organic growth,” McPhillips said. “The more cash, the more investment so the share value goes up and all employees have more investment.” 

While wages may not increase immediately, McPhillips said employee-owned workers average 30% more in pay as the business grows. More importantly, he said, they have a retirement they can count on. 

A relatively new model in the U.S. that has been used in the United Kingdom for some time, he said, is the Employee Ownership Trust. “The owner comes to an agreement with employees on the price of the business and the shares are then held in a trust,” he said. 

The trust protects the workers from a buyout and, at the same time, ensures profits are divided among the employees, he said. 

McPhillips said no matter what the model, employee-ownership brings a rationale to the workplace. “You spend all day at your job and now you are able to have a future,” he said. “The wealth gap is killing us; it affects all of us. This is not the answer to it all, but we have a low hanging fruit that is available, and we need people to know about it.” 

McPhillips added, “Pennsylvania is doing great. Companies are making the investment. The only reason there aren’t more employee-owned companies is people don’t know about it. That’s why we do what we do.” 






HB Global acquires Rochester-based mechanical and plumbing contracting company 

HB Global announced this week that it has purchased a Rochester, NY-based mechanical and plumbing contracting company. 

Harrisburg-based HB Global oversees nine mechanical, electrical and plumbing contracting divisions across the country and will be adding The Bell Company as its 23rd acquisition in 10 years. 

The Bell Company manages three subsidiaries including Bell BCI Company, Bell Constructors and John P. Bell & Sons across Charleston, SC; Richmond, VA and Baltimore, MD. 

“The purchase of The Bell Company allows us to further our mission by meeting our financial objectives and creating value for our employee owners.,” said Sal Bauccio, HB Global’s president of commercial business. “They are a trusted leader in their markets with similar values and deliver a high level of craftsmanship with additional industry experience. We welcome their entire employee base into our employee ownership model.” 

The Bell Company is a provider of heavy, complex mechanical and plumbing construction projects throughout the East Coast. It has a clientele base that includes health care facilities, research labs, data centers and more. 

The company’s revenue last year was approximately $80 million. Through the acquisition, HB Global will bring on 240 Bell Company employees. 

HB Global names president of commercial business

Salvatore Bauccio. PHOTO PROVIDED


Harrisburg-based HB Global LLC announced that it promoted Salvatore Bauccio to president of commercial business.

Prior to taking the position, Bauccio was COO of commercial business for two years and acquisition attorney at McNees Law Firm for six years.

HB Global is the parent company of HB McClure, IT Landes and HB Home Services in Pennsylvania; North Shore Mechanical in Massachusetts; Spectrum Mechanical in Arizona; and Nash Plumbing and Mechanical and William R. Nash Mechanical in Florida, South Carolina and the Caribbean.

As president, Bauccio will oversee the current six commercial divisions of HB Global and all newly acquired commercial divisions.

Bob Whalen, CEO of HB Global, said that Bauccio is able to quickly identify areas of improvement, remove obstacles and has keen decision-making talents.

“He listens and considers the differing perspectives of others. Sal is a remarkable leader and holds himself and our divisions accountable for the results they have committed to,” Whalen said. “Our core values of trust, team, grit, and growth are ingrained in every step he takes.”

This week, HB Global also announced that it would be hiring its first senior vice president of operations and strategy, Matthew Shaub.

Shaub joins the company from Cork, Ireland-based HVAC company, Johnson Controls.

HB Global hires new executive leader


Harrisburg-based HB Global LLC announced that it has hired its first senior vice president of operations and strategy.

HB Global, the parent company of HB McClure, IT Landes, Nash Plumbing and Mechanical and North Shore Mechanical Contractors, recently welcomed Matthew Shaub to its leadership team.

Shaub, a longtime strategic business executive, previously held a number of positions at Johnson Controls, a Cork, Ireland-based HVAC company. Upon leaving Johnson Controls, he founded Advantage Insights Consulting in Mt. Joy this year.

While at Johnson Controls, Shaub’s leadership roles spanned product management, strategy, sales and marketing, engineering, global operations and more.

At HB Global, Shaub will work closely with six commercial operating divisions, including HB McClure– the company wrote in a statement.

“He is passionate about strategy, business transformation, organizational culture, leadership and team development, product design and innovation, process excellence– bringing it all together to create a business advantage that fuels growth and positively impacts employees, their families, and the communities where they live, work and play,” the company wrote.


HB Global acquires New England firm, creates new division

Harrisburg-based HB Global LLC, the holding company for mechanical contractor H.B. McClure, has extended its reach north to New England via acquisition and created a new operating division in the process.

The Dauphin County company on Tuesday announced it has acquired North Shore Mechanical Contractors Inc., a specialized plumbing and piping firm based in Massachusetts that caters to industrial and commercial clients in biotechnology, life sciences and advanced technology. North Shore is a $25 million company covering eastern and central Massachusetts, southern New Hampshire and southern Maine.

HB Global officials said North Shore will become the company’s fourth division. In addition to H.B. McClure in Harrisburg, the holding company also owns IT Landes in Montgomery County and Nash Plumbing and Mechanical in Florida.

Each division maintains brand identity in its respective region and is capable of making acquisitions to expand its regional footprint. Last month, IT Landes purchased Indian Valley Mechanical in Montgomery County.

Indeed, North Shore will follow that blueprint. HB Global’s vice president Jeri Donadee said North Shore, which was founded in 1984, is a well established company in the New England region. HB Global wanted to preserve that brand.

The North Shore deal adds 85 employees to HB Global’s roster, which is now more than 1,100 employees across the East Coast. Donadee said projected revenue this year has grown to about $240 million.

HB Global finished 2018 with nearly $163.5 million in revenue, according to Business Journal records.

Much of HB Global’s growth has come through acquisitions. HB Global, which was formed in 2017 to extend H.B. McClure’s geographic reach outside of Pennsylvania, purchased three companies last year and it has made three deals so far this year.

Before creating the holding company, H.B. McClure had been on a buying spree. After forming an employee stock ownership plan in 2010, H.B. McClure completed 12 deals between 2011 and 2016.


HB Global division snaps up Montgomery County mechanical contractor

Harrisburg-based HB Global LLC – a holding company whose divisions include mechanical contractor H.B. McClure – is growing again via acquisition.

The company’s IT Landes division in Montgomery County has snapped up Indian Valley Mechanical in Harleysville, Montgomery County, to expand its reach in the Philadelphia suburbs. Financial terms were not disclosed.

Indian Valley is a small HVAC contractor with about 20 employees that specializes in construction of commercial heating and cooling systems. It was founded in 2001.

“We believe the addition of Indian Valley Mechanical will assist us in being even more responsive to the service and installation needs of our clients,” said Kerrin Musselman, president of the IT Landes division.

Indian Valley adds about $7.5 million in annual revenue to IT Landes. HB Global officials are expecting more than $45 million this year from that division, which has about 250 employees to serve clients in Bucks and Montgomery counties.

In addition to H.B. McClure and IT Landes, HB Global operates a third division called Nash Plumbing and Mechanical, based in Florida.

HB Global finished 2018 with nearly $163.5 million in revenue, according to Business Journal records. The company has nearly 1,000 employees.