Deb Oxley: The best is yet to come – a decade for EO
This new decade could be the best yet for employee ownership.
The sector is well placed in terms of awareness of its benefits by business owners, there is rapidly growing capacity amongst professional advisors in their ability to support these owners and the wider business environment is now actively seeking forms of business that deliver wider value back to society.
Added to that, our new Prime Minister has made a commitment to ensuring that the whole of the UK can benefit from economic growth, expressing his ambition to ‘level up’ the investment and development of the regions with London and the SE.
All of this suits a business model that enables all employees to have a stake, that delivers a fairer distribution of success to all employees, is based on more transparent and trusted forms of corporate governance – and is fast becoming the most popular business model for business owners across the UK to successfully manage their business succession/exit plans.
In doing so, these businesses that choose an employee ownership succession are rooting jobs and future investment in the region for the longer term.
Whilst the market is maturing, it is nowhere near mainstream with the 400+ businesses that are now employee owned making up a tiny percentage of the 5.9m SME businesses in the UK. However growth has also seen many more larger businesses choose employee ownership, with the latest large business, Seetec, choosing the model as a route to secure its long term independence to differentiate itself in a market which continues to consolidate and be dominated by extractive forms of capitalism that are prone to failure.
And whilst there are more accountants and lawyers well placed to advise on employee ownership, supported by organisations such as the ICAEW who have championed the model, there is more work to do with the UK’s banking and finance sector. For that reason, the Employee Ownership Association (EOA) in partnership with Unity Trust Bank, will host a Symposium next month to broaden awareness of employee ownership with this key group of funders.
The EOA has also grown and now supports almost 450 businesses that are either on the journey to employee ownership or are partially or wholly employee owned. Such growth has necessitated a development of our proposition, with a new learning service just launched and last year seeing our biggest ever Annual Conference for over 700 delegates.
As the presence of employee ownership across all sectors of the economy continues to grow, so does the awareness amongst these innovative businesses of their unique role in putting people at the heart of the ownership and the governance of their businesses. These are therefore businesses that have a keen interest in how the business of the future will look and in the first of this decade’s annual commemorations to our founder at the Robert Oakeshott Lecture, we will hear how the advent of technology and automation can be applied in a more humane way.
So, what will the 2020’s bring for employee ownership?
More awareness and take up of employee ownership is inevitable. As the UK’s baby boomer generation of business owners faces the ‘succession timebomb’ we expect to see more making the move to employee ownership as a way of retaining talent and securing the future of the business, whilst managing their own exit in an orderly fashion.
And we hope to see further development of the legislation that supports employee ownership, including for the Employee Ownership Trust and the various government tax advantaged share schemes, as outlined in our recent call for a National Strategy. Policy is a key enabler for the growth of the market and requires constant attention to ensure it stays aligned with the changing demographic of the UK business environment.
Finally, the importance of the contribution of SME and family businesses to the economy and especially to the regions of the UK has for too long being underplayed and in the 2020s we expect to see far more government focus here. Our #1MillionOwners campaign, in partnership with Cooperatives UK, articulates our ambition to grow the number of employee owners to 1 million by the end of decade. This will only achieve its ambition with more direct government support and intervention at a regional level, something that the EOA will stay focused on over the course of the next Parliament.
So, the 2020’s provide us with the opportunity to continue to grow the size and impact of this progressive, positive and inclusive way of doing business, which is better for everyone involved.