Why businesses from a diverse range of sectors are switching to employee ownership | RVE guest blog
The employee ownership sector has been booming in recent years, with companies across a broad range of sectors continuing to switch to employee ownership. The five RVE clients that converted to EO via an Employee Ownership Trust (EOT) in the first quarter of 2023 are a perfect illustration of the variety of businesses switching to a model that gives all staff a stake in the business.
These five companies were valued at c.£100m in aggregate, employing over 150 staff between them (now partners), and operate in a diverse range of sectors:
- Manufacturing
- Wholesale
- Construction
- Financial services
- Infrastructure project consulting
A trend we’ve observed is that a high proportion of companies switching to the EOT model are in the professional services sector, such as architects, engineering consultants, accountancy firms, solicitors and similar.
The team at RVE
However, RVE’s recent experience demonstrates that more and more businesses from a wide variety of sectors are turning to employee ownership as an option when considering succession.
What draws all of these businesses together is a desire from their (former) owners to celebrate the work their teams produce, to preserve the independence of their companies, which can remain embedded in their local communities, and to preserve their relationships with suppliers and customers.
A key outcome of employee ownership is the long-term stability offered by this ownership structure. Although an onward sale of the company by the EOT is possible, it’s a rarity, as the EOT values continued employment prospects as well as shareholder value.
As a result, we expect the five companies that converted to an EOT-owned structure in the first three months of this year will continue to serve their local communities, in Surrey, Bucks, Gloucestershire, East London and Middlesbrough respectively, for many years to come.
To find out more about RVE, which advises business owners on Employee Ownership Trust transactions, click here.
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