Employee ownership – the proven model to deliver Theresa May’s ‘Better Britain’
As the new Prime Minister calls for social and economic reform, the Employee Ownership Association (EOA) unveils its annual survey of the UK’s Top 50 employee-owned (EO) businesses and the role employee ownership will play in building a ‘better Britain’.
Now in its third year, the EOA Top 50, launched in conjunction with RM2, analyses the business performance of the UK’s 50 largest EO organisations, to chart the sector’s year-on-year progress and in support of its move into the business mainstream.
Where the top three positions continue to be held by the John Lewis Partnership, Mott MacDonald and Arup, respectively, 2016 sees five new entrants to the Top 50: Agilisys, Locala, Alfa Leisureplex Group, The Nuttall Group and Leading Lives.
This year’s results highlight the increasing contribution employee-owned businesses make to the UK economy, and how wide adoption of the model can support the call for a new economic model that works for everyone.
“The public’s appetite for change has never been greater, and there is a call for a fairer, more transparent and more inclusive way of doing business,” explains Deb Oxley, CEO of the EOA. “Employee-owned organisations are perfectly placed, not only to deal with the new demands of society’s expectations of business, but to utilise this for competitive, community and business benefit.
“Employee ownership recognises that the foundations of success are rooted in people and businesses in this sector demonstrate their commitment to rewarding the contribution staff make to a company’s success by offering all employees a real stake in the company’s future.”
Employee-owned businesses invest heavily in employee engagement, engendering a culture of collective responsibility by involving staff in decision making, giving them a powerful voice and sharing success more widely. Most operate reward schemes, which balance the executive pay gap and many have embedded employee representation at board level, as part of democratising governance powers and delivering a higher level of scrutiny and accountability.
This investment in employee engagement is one with a demonstrable return. Where Theresa May intends to tackle Britain’s ‘longstanding productivity problem’, employee-owned businesses are already leading the way. Year-on-year productivity rates amongst the 2016 Top 50 have increased by 1.5% – far surpassing those of their non-EO counterparts – and helped to deliver a 6.3% like-for-like increase in year-on-year sales, which now total £22.6 billion.
Between 2014 and 2016, combined sales of the Top 50 have increased by 10.2%, compared to UK GDP which grew at just 7.7% over the same period, demonstrating the opportunity for business owners or entrepreneurs to add real value to their organisation.
But employee ownership delivers much more than just financial benefits, states Deb:
“Businesses with a level of employee ownership are not at the mercy of what can be a very unpredictable and precarious market. Instead, they are able to remain positively and passionately independent, safeguarding not only their financial assets, but also the values on which the company has been founded.”
Today, the Top 50 community totals more 175,000 employees nationwide – a 15% increase from 2014 – and has a presence across all sectors. And with employee-owned businesses proven to be more resilient during times of recession, benefits offered by the model will no doubt only garner greater attention as the UK navigates this impending period of unrest and uncertainty.
“At a time when many people are looking for a better way to do business, employee ownership meets the demand for a fairer and more economically balanced economy.
“Having already received significant government support and with its ability to fulfil the ambitions highlighted in Theresa May’s inaugural speech as Prime Minister, employee ownership can rightly be viewed as an essential ingredient for restoring faith in business, reconnecting the country and supporting the development of a new economy”
To see the full Top 50 list, download the table below.