The unprecedented EO Knowledge Programme has found dramatic and important evidence on the positive impacts of sharing meaningful ownership and participation with employees.
Employee and worker owned businesses (EOBs) have long argued that they bring a combination of economic, social and environmental benefits to the UK economy that deserve greater recognition particularly by politicians, policymakers and capital providers.
With numbers of EOBs currently growing at over 30% per annum, we set out to conduct the largest investigation to date into whether that impact differential exists and what does it look like. We surveyed roughly 9% of EOBs in the UK and contrasted that to a comparable control group of non-EOBs. We interviewed roughly 4% of management teams to better understand the decisions that are driving economic, social and environmental impacts.
What we have found is a quiet revolution in responsible and sustainable productivity. A supply side phenomenon that deserves to have a spotlight shone on it at a point in time where the UK is crying out for a better kind of economic growth.
Read the Full Report
The headline finding is that employee owners are 8-12% more productive. Behind that, we find that EOBs tend to be making more money and doing more to recycle that money into the economy by creating more jobs and investing in improving their products and services.
That productivity figure may seem unsurprising once we acknowledge that EOBs invest more in supporting employee health and wellbeing, on-the-job training and critical benefits like flexible and remote working. Further, EOBs pay out twice as much in bonuses and dividends to employees whilst being five times less likely to make them redundant.
Add to this that EOBs are driving a fundamentally fairer economy, sharing a stake and a say at work with groups typically under-represented in business ownership, and twice as likely to have diversity and inclusion policies in place. For lower earners, EOBs pay a minimum higher annual wage of roughly £2,900 more than non-EOBs and are twice as likely to hold accreditations for fair pay and reward.
We see that EOBs do significantly more to contribute to stronger local communities, not just in terms of creating and protecting jobs and putting more cash in the hands of their workers, but also by giving more of their time, skills and funds. Finally, EOBs are more likely to be working towards net zero and hold environmental sustainability accreditations.
In short, these are good businesses providing good work; and whilst they currently make up a small proportion of the economy (just 0.1% by total numbers), they currently drive 1.7-2.1% of overall economic activity (reflecting overall GVA footprint).
There is much more to do to continue to build and sharpen this evidence base. However, given the speed of growth in EOBs and the scale of positive impacts they deliver, we should act to accelerate the future potential contribution of this sector to the UK. We can and must make people powered growth a fundamental building block of a truly responsible, sustainable economy.