Eo Day stories: EO is the Answer as digital entrepreneur moves agency to employee ownership
The owner of a digital and IT consultancy has passed up eight-figure offers from venture capitalists to give his employees a stake in their future through employee-ownership.
Gary Parlett and his wife Kate Parlett MBE founded Answer Digital 21 years ago. With offices in Leeds and London, it has grown to become one of the most respected digital companies in the UK with clients that span the NHS, international retailers and global financial institutions.
The move to employee-ownership is a natural one for Answer Digital as one of the company’s core values is recognising employee contribution.
The 85 staff will each have ownership in the business through an employee ownership trust. The trust has a board that has a direct say over the operation of the business.
The Parletts will continue in their roles to actively support the business. Senior members of the team, Richard Pugmire, Nigel Garner and Richard Ellis will join the Board. Experienced technology advisor, Finbarr Joy has re-joined the business as a non-executive director. He first worked at Answer Digital 20 years ago before taking senior technology roles at BT, William Hill and other blue-chip companies.
The deal, for an undisclosed sum, will be funded by the business. The Parlett family was advised by Paul Land at TLP with legal direction and advice provided by Ewan Hall of Baxendale and Dahren Naidoo at Freeths.
Despite the current economic challenges, the company continues to deliver record monthly growth which will exceed 20% in 2020 and £9m turnover.
The economic contribution of employee ownership in the UK is growing and accounts for 4%* of the UK GDP annually. Employee-owned companies operate across a wide range of sectors and include high street names like John Lewis and Richer Sounds.
Commenting on the move, Gary Parlett, founder and managing director of Answer Digital said: “We have grown a team that is respected across the industry as original thinkers that put innovation and a desire to deliver exemplary work at the heart of everything they do. To support the team and create a platform for what comes next, we have decided to move Answer Digital to employee ownership. It means everyone will have a stake in building a sustainable business that has the freedom to do great work.
“Typically, employee-owned businesses have higher productivity, greater levels of innovation and are more resilient to economic headwinds. The people that work in them are often more engaged, happier in their jobs and less stressed. We believe that employee ownership can answer some of the big questions we are facing as a society and an economy. We need to address the balance between work and reward and unite people behind a common purpose. We are passionate that this is the best route for our business to continue to grow and deliver award-winning solutions.”
Answer Digital has a long track record of investing in its people. Over half of its staff are alumni of its Academy, which was created to nurture the next generation of talent for the company.
Parlett said: “Putting our people and their development at the core of our business has been a key factor in us to be named the ‘Highest performing in the UK’ by industry analysts Megabuyte in January.
In the fast-moving world of digital consulting, we will continue to challenge the norm. When we first launched the business it was called the Ultimate People Company, and now we have the opportunity to live up to that promise.”
Answer Digital is a digital transformation and IT consultancy company that researches, designs, and develops software solutions for companies across a wide range of sectors. It provides advice and support on organisational, operational and cultural change.
Deb Oxley, chief executive of the Employee Ownership Association (EOA) said: “We congratulate Answer on its move to employee ownership – sustaining its values and independence for the longer term. Businesses that give employees a stake and a say build trust and shared responsibility, therefore uniting leaders and employees behind a common purpose. This leaves the business in a better position to flex and adapt, key qualities needed to help the UK build back better.”
The past year has seen the highest growth in the number of employee-owned businesses to date, with the White Rose Survey conducted by Leeds Business School recording more than 470 businesses now being employee-owned in the UK with 41% of that growth happening since 2018.