People Powered Growth Report


James de le Vingne,
Chief Executive of the EOA

The UK is leading the world in the speed of growth of employee ownership, with countries such as Canada, Australia and Denmark amongst others looking to learn from UK policy and practice.

Importantly, the recent dramatic rise in numbers of employee owned businesses was activated by a policy intervention – the 2014 introduction of the new Employee Ownership Trust model (EOT) – and has been significantly accelerated through awareness raising and iconic new converts over the past 10 years.

In October 2023, we can celebrate a thriving sector of over 1,650 businesses who are driven to succeed every day by a powerful combination of sharing meaningful ownership and participation with employees and workers. READ MORE

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Delivery of the EO Knowledge Programme is led by independent think tank Ownership at Work.

A guide to effective & impactful practice.

Read the executive summary

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. READ MORE

Breakdown of Findings:

The rapid rise of employee and worker owned businesses

There are at least 1,650 employee and worker owned businesses (EOBs) in the UK in October 2023. The true population is likely to be higher but this data is not presently recorded nationally in a standardised way.

In the last 12 months, the sector grew by over 30% (roughly 330 new EOBs) and between 2011-2023 has grown at an average annual rate of 16% (compared to 2.2% growth in all active companies in the UK over the same period).

EOBs contribute disproportionately to the UK economy: 0.1% of overall businesses drive 0.8% of direct GVA and 1.7-2.1% of overall economic activity (reflecting direct, indirect and induced GVA).

EOBs are increasingly found in all major sectors of the economy and in every region of the UK.

A Stronger Growth Economy

Rapid growth in employee ownership is helping to create more profitable businesses that are markedly defying the UK’s national productivity trend whilst recycling earnings into providing good jobs and innovating new products and services

Employee owners are more productive

EOBs are 8% – 12% more productive than
non-EOBs (calculated on a Gross Value Added
per employee basis).

EOBs reinvest more into R&D

EOBs are over 50% more likely to have increased investment in Research and Development (R&D) than non-EOBs in the last five years.

EOBs create more jobs

EOBs are over 50% more likely to be expanding their workforce than non-EOBS (64% of EOBs increased employee headcount in the last five years, compared to 41% of non-EOBs).

Greater economic contribution

EOBs make up just 0.1% of businesses but drive 0.8% of direct GVA and 1.7-2.1% of overall economic activity (reflecting direct, indirect
and induced GVA).

EO tends to drive up company profits

The majority of EOBs (57%) reported profits increasing since becoming EO and EOBs are over 25% more likely to have seen profits increase in the last five years than non-EOBS.

A healthier economy

EOBs not only fuel economic growth but also create a healthier and more fulfilling work environment, leading to elevated employer satisfaction, motivation, and work-life balance. Through prioritising the holistic health and happiness of their employees, EOBs are champions of a healthier and more rewarding work experience.

As well as being good for the business, EOBs generate multiple benefits for their employees. They go further to protect and promote the health and wellbeing of their workforce and are rewarded by employees who report higher levels of job satisfaction:

EOBs invest more in employee health and wellbeing

48% of EOBs offer supported access to private healthcare compared to 34% of non-EOBs; and more than twice as many EOBS (74%) provide access to mental health resources than non-EOBs (34%).

EOBs do more to protect employee quality of life

EOBs are more likely to offer flexibility in contracted hours (61% vs 36%), allow employees to work remotely (84% vs 47%) and almost 3 times more likely to support career breaks or sabbaticals (47% vs 16%).

EOBs are stronger on health
and safety

Though incidence rate for all types of business are low, there is a significant difference between EOBs (0.1%) and non-EOBs (0.9%). 

EOBs create happier employees

83% of those surveyed reported increased employee engagement
and motivation since adopting an EO model and 73% reported increased job satisfaction. 

A higher skilled economy

In addition to doing more to invest in developing on-the-job skills, it is a powerful feature of EOBs that they share high levels of critical business information and provide channels to directly influence decision-making, which in turns supports employee learning and contribution:

EOBs invest more in training and skills
93% of EOBs invested in on-the-job learning and development training in the last 12 months compared to 85% of non-EOBs; EOBs spend an average of £38,000 (12%) more on training per company compared with non-EOBs. 

EOBs help employees learn about their businesses
EOBs are more likely to have critical business information shared than non-EOBs with them in every category surveyed (costs, decision-making by the senior team, investments, performance, new business and sales).

EOBs encourage employees to participate in how their businesses are run
Some EOBs go further than others in enabling participation: employees can influence strategic decisions at least once per month in 78% of EOBs compared to 59% of non-EOBs; EOBs
(69%) are more likely than non-EOBs (33%) to have dedicated employee representatives in place.

A fairer economy

EOBs are ensuring work pays for their lower income earners, protecting their employees’ financial wellbeing and guaranteeing fair opportunities to progress. By sharing ownership right across the workforce, this inclusive business model is chipping away at wealth and income inequality:

EOBs pay a fairer basic wage

EOBs tend to have a higher minimum annual wage than non-EOBs by around £2,900 (after controlling for firm size); EOBs are more than twice as likely to hold accreditation for “fair pay and reward” (e.g. Living Wage Employer) compared to non-EOBs (37% vs 15%).

EOBs do more to look after the financial wellbeing of employees

EOBs are more likely than non-EOBs to provide cost of living support, with more than a 50% difference in levels of financial wellbeing support, one-off bonus payments and salary sacrifice schemes.

EOBs pay more attention to diversity and inclusion

EOBs are more than twice as likely to have diversity and inclusion (D&I) policies in place covering recruitment, career progression, gender pay gaps, support networks, representation in senior roles and establishing a disabled and neurodivergent workplace

EOBs share more of the value that employees generate

Dividends/bonuses are more than twice as large in EOBs than non-EOBs.

EO addresses inequality by spreading ownership across hands of diverse groups

In an economy where official data suggests the majority of business owners are white and male, EOBs put ownership into the hands of diverse groups who
typically don’t own businesses. 

A more community-focused economy

Alongside contributing more to the economy and to support their employees, EOBs go notably further in supporting and promoting the resilience of their local communities:

EOBs are also considerably more likely to make charitable donations than non-EOBs (86% vs 55%). EOBs in aggregate give over £500m more per year than non-EOBs.

EOBs are significantly more likely than non-EOBs to provide community support, such as advocating on behalf of local community causes, and more than twice as likely to offer volunteering days as non-EOBs (43% vs 15%).

A more resilient economy

EOBs have proven consistently resilient through the national economic challenges of recent years, retaining more stable profits, being less likely to make employees redundant and sustaining levels of investment in their products and services:

EOBs offer greater job security
Employees at EOBs are five times less likely to be made redundant in the last three years compared to non-EOBs (that figure goes upto eight time less likely for smaller firms).

EOBs are more optimistic about the economy
Only 4% of EOBs are likely to decrease future R&D investment compared to 10% of non-EOBs. 

EOBs are more financially resilient
EOBs were less likely to see their profits decline over the last five years (14% vs 25% for non-EOBs) including through pandemic and supply
chain crises.

Principal Partner Forewords