Employee-owned companies working for the greater good

EMPLOYEE-OWNED companies out-perform rivals on investment, innovation, integration with customers and impact in their communities, according to the Baxi Partnership, which is holding a two-day event in Sheffield this week to promote the benefits of employee ownership.

The partnership was established as a trust after Lancashire boilermaker Philip Baxendale sold his business, at a fraction of its cost, to his employees.

Now independent from the boiler brand, the partnership supports businesses which are or want to become employee owned.

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Chris Dunlop, an adviser at the trust, said the structure encourages all employees within a company, from senior management to the shopfloor, to behave like owners of the business.

He told the Yorkshire Post that it is relatively easy to transform a company to ‘employee-ownship’.

“I don’t think it’s more complex than any other business process,” he said. “You are working with people within the company and not having to deal with external funders.”

The trust has been working with employee-owned companies for the last 10 years.

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Mr Dunlop estimates there are around 30 such businesses in Yorkshire, including manufacturer Gripple and uniform supplier School Trends.

The John Lewis Partnership is a well-known example. Mutuals and co-operatives share some of the same characteristics.

Speaking of the benefits, Mr Dunlop said: “They invest heavily for the medium to longer term in terms of capital structures and development of employees.

“Because they tend to have open management structures, they tend to be more innovative, taking ideas from everybody in the company.”

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He said that employees integrate better with customers because they focus on medium and long-term relationships and their companies have better staff retention rates.

Mr Dunlop claimed that a large number of employee-owned companies automatically donate a percentage of profit to local charities and significant employee time is spent in the community.

While employee-owned companies might be less profitable, he said they make sufficient profits to satisfy all stakeholders, as opposed to having to worry about external shareholders who could be anywhere in the world.

“Do they make more profits year on year? Probably not. Do they make more profits over 10-15 years? I would say so,” he added.

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School Trends became employee-owned in 2004. Director Kelwin Heighton said: “Every member of the team can honestly feel they are making a difference.

“We have a true sense of ownership that contributes to making School Trends a special place to work.”

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