How employee-owned businesses are on the rise as the sector reaches 1,000 milestone ahead of National EO Day
The employee-owned sector has passed the milestone of 1,000 businesses.
The key growth sectors include professional services, construction, manufacturing, retail and wholesale, and Information and communications, according to the Employee Ownership Association (EOA).
University of Leeds professor Andrew Robinson, who is a research partner of the EOA, said: “Employee ownership is now in the mainstream of British business, thanks mainly to the phenomenal success of the Employee Ownership Trust (EOT).
“EOTs are so attractive because they enable business owners to step back without fear their company will be taken over by someone who does not value the culture, values and employees that are part of the business.”
More than seven out of ten employee owned businesses have a statement of purpose, which includes making a positive contribution to society and the environment, research by professor Robinson and professor Andrew Pendleton of the White Rose Centre for Employee Ownership.
While 96 per cent say that looking after the workforce is a key measure of business success.
The research also shows that 97 per cent of employee-owned businesses have at least one form of employee governance and 74 per cent have at least two.
Staff involvement is also reported to be really high amongst these types of businesses with 90 per cent of employee-owned companies reporting that employees have some or a lot of say in decisions on working conditions and 85 per cent have some or a lot of say in new working methods.
While 75 per cent of businesses share financial information at least several times a year and a further 21 per cent share it at least annually.
The EOA coordinated its tenth annual EO Day, a national day of celebration bringing together employee-owned businesses, yesterday.
The organisation is calling for further cross-party support of the employee-owned sector and its growth, as a model that can unlock the potential of individuals, businesses and the economy.
The index for the Top 50 Employee Owned Businesses by size, compiled by RM2 and published by the EOA, showed a median productivity increase of 5.2 per cent, double the UK average of 2.6 per cent, or 9.4 per cent on a like-for-like basis - comparing those on list last year against their own results.
James de le Vingne, chief executive of the EOA, said: “On this, the tenth EO Day, we are delighted to see the exceptional growth in the sector.
“It is together with our members and stakeholders that over the past 10 years we have supported the sector to grow.
“Now that we have this momentum, which indicates the relevance of the employee ownership model during a time where businesses are looking to create certainty and be more ethical in their approach to employees and the environment, we are asking how we can make sure the economy can reap the evidenced benefits of employee ownership at an even greater scale.”
South Yorkshire has become a hotbed for the employee ownership sector.
Sheffield City Region became the first city to commit to setting up an Ownership Hub last year with employee-owned law firm Tapestry and manufacturing company Gripple at the centre of it.
Hugh Facey, founder of Gripple, said: “I have been able to step back from the business which is now run by employees who have moved up and will keep it alive for future generations through employee ownership.”
Fourth generation family firm becomes employee-owned
Last week Gilbert Thompson, a fourth generation, family-owned wholesaler in Leeds, announced it had also become an employee-owned business.
The £46m turnover business was established in 1946 by Gilbert Thompson.
It is now managed by the fourth generation of Thompsons, brothers Daniel and Richard. They are transferring 80 per cent of shares to an Employee-owned Trust (EOT) for the benefit of employees. The brothers will remain joint managing directors.
“Transferring ownership into our amazing team’s hands ensures our culture and values live on, which was one of the most important factors to us in considering any next chapter for the company,” they said.