What The Evidence Tells Us
The employee ownership sector has more than doubled in the past three years, smashing the 1,000 milestone for the first time.
The success of the employee ownership trust EOT has helped to change the shape and size of the sector. The accelerated growth is thought to linked to an increase in awareness for both businesses and advisors, the pandemic forcing owners to think about their own mortality and making sure they have a succession plan, and businesses wishing to be more sustainable with better impacts for people and the environment.
The latest statistics, provided by Employee Ownership Association (EOA) research partners Professors Andrew Robinson (University of Leeds) and Andrew Pendleton (UNSW) of the White Rose Centre for Employee Ownership (see the snapshot below), are accompanied by a snippet of their recent survey results that show the sector is delivering better business through giving employees a meaningful say:
- Being socially responsible – 71% of EOBs have a statement of purpose, which includes making a positive contribution to society and the environment, while 96% say that looking after the workforce is a key measure of business success
- Governance – 97% of EOBs have at least one form of employee governance, 74% have at least two
- Involved and informed – 90% of EOBs report that employees have some or a lot of say in decisions on working conditions, 85% have some or a lot of say in new working methods. 75% of businesses share financial information at least several times a year and a further 21% share it at least annually.
Meanwhile, the top end of the employee ownership sector continues to out perform the rest of UK business in terms of productivity at between two and three times the national average, see the Top 50 Employee Owned Business index below.
White Rose Centre Employee Ownership Profile | June 2022
The sector has been measured at 1030 businesses in total in June 2022.
It was a record year for growth in 2021 with 285 new EO businesses.
So far in 2022 there have been 118 new employee-owned business, up to but not including June 2022.
We’ve seen interesting changes in the Top 5 Sectors remain stable, with once again construction continuing to grow from a low base three years ago to being to being the second largest subsector.
While professional services, which usually includes professional, scientific and technical (a large proportion are architects) , plus admin and support services, remains the largest. This segment, historically also featured the component of information and communications. However, the growth in this part of the economy now deserves its own section overtaking health and social care in the Top 5, which now makes up less than 4% of the sector.
- Professional services 38.2%
- Construction 13.2%
- Manufacturing 12.8%
- Wholesale and retail 10.5%
- Information and communications 9.3%
The growth of employee ownership over the past three years is also mirrors the sector as a whole, with construction once again showing growth:
- Professional services 33%
- Construction 18.2%
- Wholesale and retail 11.6%
- Manufacturing 10.2%
- Information and communication 9%
The Employee Ownership Top 50
The Employee Ownership Top 50 is an analysis of the UK’s fifty largest employee-owned companies, compiled by RM2 and published by the Employee Ownership Association.
During April 2021, UK employee owned companies were identified from multiple sources: EOA members, internet searches, professional advisers active in the sector and searches of Companies House.
The list is ranked by employee numbers. Figures are gathered from companies’ latest annual accounts filed at Companies House since June 2020.
Published in June 2022, the Employee Ownership Top 50 shows:
- Combined sales: £21.7bn (up 1.3 on a like for like basis %)
- 180,213 combined employees (down 0.2% on a like for like basis)
- median productivity increase of 9.4% ’like for like’ or 5.2% as a whole, double the UK average of 2.6%
This report shows the highest movers as Mott Macdonald into second place, and Howden Group in fifth position behind other regular table leaders Arup, and John Lewis Partnership. New to the Top 50 are Foster + Partners Group Ltd, Buckingham Group Contracting Limited, Independence Matters CIC, and Go Ape (Adventure Forest Group Ltd.
EOT Survey EO Day Snapshot | June 2021
There are 576 employee owned businesses using an EOT in the UK.
There were 139 new EOTs in 2020, while Q1 in 2021 saw a record quarter of 72 EOT transitions.
In January 2021 it was found that EOTs represented 1 in 20 of all private company sales.
Approximately 40,000 jobs have been sustained or created by EOT businesses.
The Ownership Dividend
In 2018 we published the Ownership Dividend: The case for Employee Ownership after a year-long inquiry into the employee ownership as an economic and social enabler.
The Ownership Dividend is the evidence report from a year-long, independent, business-led Inquiry. Read more about the inquiry
The report found that the Ownership Dividend can deliver a more productive and inclusive economy in three ways:
- Improving UK productivity – via more businesses unlocking the enhanced performance and productivity powered by the increased personal endeavour and discretional efforts of employees acting with greater common purpose once they become employee owners.
- Resilient regional economies – via a more sustainable and resilient business model that root jobs locally by providing an effective business succession solution, business independence and the ability to plan growth and investment over the longer term.
- More engaged employees – via more inclusive, transparent and effective models of corporate governance and employee engagement which better involve, motivate and financially reward individuals through their ownership stake
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