All change – what the EU Referendum might mean for the growth of employee ownership
Politicians are debating. Lobbyists are championing. Commentators are pondering. Business leaders are worrying. And the majority of the population are still somewhat confused, wondering whether there will be any sudden clarity before the EU Referendum to help us cast our vote with more confidence.
Whilst there are different scenarios being described about the likely impact of the result, the honest truth is that no one knows for sure what the outcome of the vote next week will mean – to the UK, to business or to the individual.
However, what most people do agree is that whatever the outcome of the vote, this will be new territory for the UK.
The UK will have a changed relationship with Europe, whether it is in or out. And the journey towards and beyond the vote, will have unleashed a new debate and need for wider engagement about sovereignty, devolution and independence. But the outcome should also return some level of certainty to the economy, albeit that either outcome will lead to a renewed relationship with Europe.
So it will be “all change”, either way.
The impending change, the need for wider engagement and the prospect of more certainty are three things that the employee ownership sector is very familiar with.
As it is change that causes business leaders and owners to consider employee ownership in the first place: when an owner is considering their future succession and the likely change in ownership that will be needed; when an entrepreneur is establishing a new start up and needs to change their approach to recruitment; when local authorities and health providers are facing budgetary pressures and need to change delivery models; or when a business leader is seeking to change pace within their business by engaging their workforce with a new growth strategy.
And whilst employee ownership structures deliver innovative and different models of business ownership, it is the engagement with employees which forms an implicit part of the structure that is the key to unlocking and maintaining the many benefits that this business model delivers, including higher levels of productivity and profitability, as well as enhanced resilience and the ability to withstand economic turbulence.
And, finally, businesses that are owned in part or in whole by their employees have a more certain future, due to the fact that their shareholders are their employees, hence there is a lack of external market pressure, or the need to react to the volatility of shareholder demands.
Interest in and uptake of employee ownership has never been greater and the EOA predicts that employee ownership will continue to prosper – whether the UK is ‘in or out’ of Europe.
The majority of the growth in employee ownership results from business succession, and once the Referendum result is known and more certainty returns, there will be an inevitable increase in the flow of family businesses, private companies or partnerships of all sizes, across all sectors of the economy, planning for the future and considering employee ownership as part of this.
And regardless of the outcome, the UK is committed to growing the number of new starts up – and the employee ownership structure will continue to be highly attractive to entrepreneurs needing to find innovative ways to attract and retain the best talent.
The continued rebalancing of public finances will also no doubt continue to see further efficiencies from the public sector – and the inevitable growth in alternative employee owned delivery models and ‘mutuals’ for essential public services such as social and health care.
Whilst not protected by their ownership structure, and subject to the same market pressures as others in their sector, existing employee owned businesses will also be well placed to face any resulting change or turbulence caused by the result – supported by an ownership structure that allows them to invest and plan for the long term.
Whilst future gazing is a risky business – it is clear that change is on the horizon and that new forms of engagement will be necessary in order to return the UK economy to some form of stability and certainty. And to this end, the employee ownership sector is well prepared to seize the post-Referendum opportunities – whatever they may be.