What The Evidence Tells Us
The employee ownership sector has seen unprecedented growth in 2020, which has continued in the first half of 2021.
There has been 250 new employee owned businesses in the past 18 months, making a total of 730 employee owned businesses in the UK (as of June 2021).
Much of the growth has seen SMEs using the EOT model, now totaling 567 businesses in the UK being employee owned using an EOT.
In a survey of employee owned businesses (from a sample of 230 businesses) 70% saw employee ownership as a socially responsible thing to do, with 77% having ‘making a positive contribution to society and environment’ as part of their purpose.
In 2020, 78% of the sector said they had felt detrimental effects of the pandemic, while 60% had paid a dividend to its employee owners during that period.
White Rose Centre EO Growth Snapshot | June 2021
The sector has been measured at 730 businesses in total (up from 470 in June 2020).
It was a record year for growth in 2020, with 148 new EO businesses – that’s a 31% increase.
So far in 2021 there have been 113 new employee-owned business, up to but not including June 2021.
While growth by regions has London (22%), South East (16%), Scotland (13%), North West (10%) and East of England (10%) in the top 5.
We’ve seen interesting changes in the Top 5 Sectors for growth.
Construction continues to grow – a sector that barely featured three years ago. While professional services, which usually includes; admin and other services’; ‘finance and insurance’; and ‘real estate’, usually also has 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 5% of the sector.
- Professional services 40%
- Manufacturing 13%
- Construction 11%
- Wholesale and retail 10%
- Information and communications 9%
Growth of these sectors becomes more apparent when you look at the figures including 2020 and 2021 (to June 2021):
- Professional services 41%
- Construction 17%
- Wholesale and retail 15%
- Manufacturing 10%
- 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 May 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 June 2020.
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 2021, the Employee Ownership Top 50 shows:
- Combined sales: £21bn (Up 6.4%)
- 180,405 combined employees (up 2.8%)
There are six new entrants – Activate Solutions Group Ltd, Briggs & Forrester (UK) Ltd Cleantec Services Ltd, Punter Southall Group Ltd, Oxford Policy Management Ltd, William Gibbons 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
” width=”20″ height=”20″>