KTA Leans on Employee Ownership to Get Through Pandemic
Originally published for the Pittsburgh Airport Area Chamber of Commerce Oct. 11, 2020
The Pittsburgh-based company relied on the ingenuity from employee-owners and the four Rs to deliver on projects despite the pandemic.
PITTSBURGH, PA – Few jobsites were permitted to operate when the pandemic hit earlier this year, and those that were could only do so only under strict safety regulations. At a New York City bridge painting project, many of the work locations were a long walk from the nearest access point, so workers had to carry all their tools and supplies for the day in a backpack.
They were also asked to include a 40-pound, five-gallon hand wash station but quickly realized that was not feasible. In the absence of hand sanitizer at the local retailers, washing their hands with soap and water was the only option. So Jay Cameron, one of Pittsburgh headquartered KTATator's (KTA's) steel coatings inspectors devised a hand wash system using a portable shower meant for muddy dogs. "I did an internet search to find a better more compact hand wash option and found the screw-on soda bottle shower caps," Cameron said. The workers were able to fill a small soda bottle with water and carry it in their backpack along with a small amount of liquid soap and a towel.
This provided enough water for them to wash their hands during the workday and easily maneuver around the bridge. "Jay's initiative to promote safety and hygiene on the jobsite is an example of an employee-owner understanding that we are truly all in this together," Charita Bush, Corporate Training Manager for KTA, said.
Founded 70 years ago by Kenneth Tator, KTA's Coatings Group, is one of six business units. This group is engaged in protecting, inspecting and evaluating the performance of industrial protective coatings for departments of transportation across the country and major industrial clients in nearly every business sector. Over the years, they have worked on all the major bridges in Pittsburgh, Heinz Field, PNC Park and numerous tank and pipeline projects.
When the founder's son was ready to retire, Ken considered selling the company but couldn't find a buyer that would commit to keeping KTA in Pittsburgh and retain its employees or its culture. So, when his management team presented employee ownership as an option, Ken felt he found the perfect solution.
The company began the transition in 2010 and by 2015, KTA was 100% employee-owned through an Employee Stock Ownership Plan (ESOP). Between 2010 and 2019 the assets held in the ESOP Trust for employees to draw from when they retire increased from $172,547 to $9,225,000 — more than 5,000%. Additionally, employment numbers grew from 196 to 325, employee satisfaction was at record highs and the turnover rate was at record lows.
"This isn't a surprise. We see this every day. Employee-owned businesses are 8-12% more productive year-over-year than non employee-owned businesses." Kevin McPhillips executive director of the Pennsylvania Center for Employee Ownership (PaCEO), said. "The average employee in an ESOP company has more than two-anda-half times more retirement savings than non employee-owned employees. And they never put a penny into the account! And so few know about this!"
ESOPs are an increasingly popular ownership option. KTA is just one of more than 285 Pennsylvania companies who are employee-owned. Other Pittsburgh-based companies include Sheetz, Nicklas Plumbing Supply and Voodoo Brewery. Nationally, 5,000 other companies have ESOPs.
While the pandemic has certainly effected KTA's core businesses, current CEO Dan Adley is optimistic. "When COVID-19 hit our radars early this year, we immediately got to work ensuring the health of our employees, clients and vendors," he said. Once the situation became relatively stable, Adley rolled out his plans for the future. "We're calling it the Four R's of Organization Health—Respond, Recover, Return to Scale, and Reimagine," he said. KTA first responded to everything happening with the business with transparent weekly fireside chats and open Q&As.
The recovery stage was primarily focused on securing a PPP loan, transitioning employees to work remotely, interacting with our clients and connecting to employees posted all around the world. Right now, the company is focused on returning to scale. KTA suffered significant topline loses like most companies in the industry but that doesn't worry Adley. "I am blessed being the CEO of an employee-owned company. It's a lot easier to draw on people and ask them to do something different because, as owners, we all have a stake in the outcome," he said.
The reimagine stage is probably the most unclear but, according to Adley, also the most exciting. "We're not going to come out of this the same way as we went in. So, we have to envision a different future that relies upon our core competencies," Adley said. "It's probably the stage I'm most excited about."
To learn more about KTA, visit kta.com.