When I talk about the reasons for becoming employee-owned, I like to use an analogy: who washes a hire car? There is a mental change that happens when you own something; it drives behaviours that relate to what needs to be done, rather than what you want to do.
Evidence shows that, in addition to providing owners with the exit they want, employee-owned businesses engage staff in a more meaningful way.
An ownership stake, delivered via direct shares, a trust, or a hybrid, along with the accompanying influence exercised through a structure of representation, drives more individual discretionary effort.
This then directly results in higher levels of financial performance, with new employee-owned businesses reporting an immediate increase in profits in the year after transition.
Recent data from the White Rose (WRCEO) Survey shows there are 370 employee-owned businesses in the UK, with more than 60% of conversions having happened since 2014. The sector experienced growth of 18.5% in 2018, its best year yet.
The Top 50 employee owned businesses 2019 list illustrates a group of organisations that continue to perform well, especially when compared to UK business as a whole, with combined sales of £19.2bn, up 3.5% like-for-like, over 166,000 total employees, up 1.4% like-for-like, and wages up 2.5% like-for-like.
Meanwhile, the mean increase in productivity of the Top 50 is 6.2% in 2016, 7.6% in 2017, 9.7% in 2018 and 7.7% in 2019. The growing interest in employee ownership by larger privately owned businesses is best illustrated by the fact that over the past six years the number of employees required to enter the Top 50 has increased from 143 to 403, with recent entries from Riverford Organics and Richer Sounds.
