The partial ownership of a business by employees is not a new development. Many of the UK’s largest companies have some form of employee share ownership

Overalls

This reflects the widely held belief that employee motivation and productivity can be increased by providing them with a stake in the business which in turn will lead to greater profitability and a higher value of the business.

From John Lewis Partnership to Suma Wholefoods, employee owned businesses put their employees in control of their business. They report far lower levels of staff turnover compared to sectoral averages, whilst employee ownership is associated with higher levels of collective responsibility.

An increasing body of research shows that combining share ownership with a greater influence in how the organisation operates can lead to superior business performance.

  • CASS business school reported that employee owned businesses report productivity levels between 9%-19% higher than similar traditionally structured businesses.
  • By offering the opportunity to share ownership, influence decisions and share in the rewards, co-owned businesses are able to attract and retain talented individuals.
  • Employee owned businesses that encourage participation from employees benefit from increased levels of cost saving initiatives and business promotion ideas.
  • Operating profits of the top 50 employee owned businesses increased by 25% in 2014.
  • 80% of employee owners experience a sense of achievement from their jobs.
  • They benefit the communities they operate in because the rewards are shared amongst the people who work within the business rather than going to a single owner or external shareholder as is the case in more traditional structures.
  • Employee owned companies consistently outperform the FTSE all share.
  • Employee owned companies that combine share ownership and employee involvement report very high levels of employee engagement, employee commitment, retention and low levels of absenteeism.
  • Successive Governments have promoted employee ownership because they recognise its potential contribution to the economy. A range of factors combine to make employee owned businesses an asset to the UK economy.

Companies which are employee owned, or who have large and significant employee ownership stakes, now contribute £30 billion to GDP.

The sector is growing because employee ownership is proving to be a durable, successful business model that’s extremely well suited to the challenges of 21st century management.

How can we help?

If you are exploring employee ownership, we can help you to identify the most appropriate model to suit your objectives. We are happy to meet at client’s offices, or at our London office, without charge or future obligation. Please contact us for an initial discussion.