How employee ownership has seen 'unprecedented' growth over the past year

The employee ownership sector grew from 470 businesses in June 2020 to 730 in June 2021, the White Rose Survey (WRCEO) showed.

Professor Andrew Robinson, director of the White Rose Centre for Employee Ownership at the University of Leeds, said: “The employee-owned sector goes from strength to strength.  It looks like growth in 2021 will match or even exceed the 30 per cent growth seen in 2020.” 

The use of Employee Ownership Trusts (EOTs) as a succession option has increased, with 72 businesses becoming employee owned through an EOT in the first quarter of 2021, according to an EOT Survey compiled by RM2.

This takes the total number of businesses using an EOT model to 567 businesses.

While the top 50 employee-owned businesses by size had combined sales of £21m, an increase of 6.4 per cent, they also saw a 2.8 per cent rise in the number of combined employees to 180,405.

Nigel Mason, associate director at RM2, who compiles the Top 50 employee-owned businesses and the EOT survey, said: “There is a clear upward trend for employee ownership conversions via an EOT, with the last 18 months seeing unprecedented growth particularly amongst SMEs.

“Meanwhile, the top end of the sector continues to grow in terms of sales and employees, despite a difficult year for many businesses.”

Deb Oxley OBE, chief executive of the Employee Ownership Association (EOA), said: “We have seen unprecedented growth in employee ownership over the past year, with one of the factors being that the pandemic has made business owners think about the future of their businesses.”

On Friday, the employee ownership sector celebrated EO Day with Sheffield-based wire joining and tensioning devices manufacturer Gripple hosting an ice cream van. Earlier in the week, a new national initiative aiming to support businesses, advisers and regions to grow employee and worker ownership called the Ownership Hub was launched with Sheffield City Region becoming the first region to partner it. Dan Jarvis, mayor of Sheffield City Region, said: “This is a hugely exciting opportunity. Not just because it gives us the chance to boost our support for co-ops and employee ownership, but because it will help to weave the thread of co-operation through our plan for economic recovery and renewal in South Yorkshire.

“It is an integral part of a greater effort to not just create a more dynamic, productive and resilient economy, but to reform its structure – to change the system in a way which makes it fairer, more inclusive, and better able to serve the aspirations and needs of the people of South Yorkshire.”

The recent White Rose survey showed that 77 per cent of respondents felt that becoming employee owned was a socially responsible thing to do and that 70 per cent had “making a positive contribution to society and the environment” written into their purpose.

More of a voice for firm’s staff

Law firm Tapestry Compliance became employee owned in October 2020. The Sheffield-based firm decided to go down the EOT route.

Debbie Knight, a credit controller in the finance team at Tapestry, said: “It gives me more confidence to voice an opinion, whether it is taken on board or not. More staff togetherness and aiming for the same goals means greater success and reaping the rewards.”

---

Support The Yorkshire Post and become a subscriber today.

Your subscription will help us to continue to bring quality news to the people of Yorkshire. In return, you'll see fewer ads on site, get free access to our app and receive exclusive members-only offers.

So, please - if you can - pay for our work. Just £5 per month is the starting point. If you think that which we are trying to achieve is worth more, you can pay us what you think we are worth. By doing so, you will be investing in something that is becoming increasingly rare. Independent journalism that cares less about right and left and more about right and wrong. Journalism you can trust.

Thank you

James Mitchinson