The Evidence

Advantages of Employee Ownership

The employee owned business sector in the UK is growing because co-owned companies tend to be successful, competitive, good to work for, and sustainable.

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:

• Independent research suggests that a combination of shared ownership and employee participation delivers superior business performance.
• Because they're co-owners, staff in employee owned businesses tend to be more entrepreneurial and committed to the company and its success.
• Because they're run in an open way, employee owned businesses tend to have a strong commitment to corporate social responsibility and involvement with the communities they operate in.
• The employee owned business sector adds to the diversity of Britain's economy - by offering a vibrant and different model for achieving business success.
• Because they have high employment standards, involve staff and give everyone a stake, employee owned businesses are good at recruiting and retaining talented, committed staff.
• Employee owned companies are good at innovation because managers go out of their way to consult, share information about the company, and give staff responsibility.

For an independent and impartial summary of the evidence about employee ownership written by specialist research company Matrix Evidence, click here

For a landmark study by Cass Business School on the performance of employee-owned businesses over economic cycles, click here

Performance

Companies which are employee owned, or who have large and significant employee ownership stakes, now account for over £25 billion in total annual turnover.

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.

Contrary to outdated notions about employee ownership, Employee Ownership Association Member companies and other employee owned businesses tend to:

• Have highly professional management, with strong decision making authority recognisable to any successful plc and operate on a hyper-democratic model.
• Aim to make, and do make profits, but simply distribute them differently to non-employee owned businesses.
• Are quite capable of generating growth by raising funds internally or externally.
• Operate successfully in highly competitive markets, including international markets.
• Are exceptionally well equipped to handle innovation.
• Can deliver higher productivity than comparable non-employee owned companies.