The most positive and wide-ranging benefits of employee ownership have been confirmed in a landmark UK report released in October, 2023.
The new research suggests that the fast-growing UK employee ownership sector is markedly outperforming the UK’s national productivity trend while simultaneously contributing to employee well-being, fair pay, community resilience and commitment to net zero. The report noted that the number of employee-owned businesses in the UK also increased by 30% over the last year. Commenting on the report’s findings, Fieldfisher partner Graeme Nuttall OBE (and author of the “Sharing Success: The Nuttall Review of Employee Ownership” for the UK Government) said:
“These findings confirm what practitioners in this area have long seen as the key benefits of employee ownership – a business model that is now rapidly being recognised as a force for social and environmental good.
For example, an 8-12% productivity premium was just the start, with the study also revealing employee ownership’s wider economic benefits to the UK economy at a time when fresh thinking and positive practical options are very much needed.
This large scale, comparative, deep-dive research has been conducted to a very high standard and is one which every policy-maker should be taking note of.
If you wish to reduce inequality, raise productivity, boost growth, create a healthier, happier and skilled workforce and a fairer, resilient and more community-based economy, then all the policy levers you can pull to grow employee ownership in our country are indicated in this report.”
You can see the report ‘PEOPLE POWERED GROWTH 2023 – The rapid and impactful rise of employee and worker ownership in the UK’ at: https://ownershipatwork.org/wp-content/uploads/2023/10/People-Powered-Growth.pdf.
In this most ambitious study, independent researchers surveyed over 9% (152) of the UK’s 1,650 Employee Owned Businesses (EOBs) and compared results to a control group of 285 non-EOBs. They found that EOBs are 8-12% more productive based on Gross Value Added (GVA) per employee.
The study linked this productivity uplift to a range of powerful findings, including that EOBs:
- pay twice as much in bonuses and dividends to employees
- were five times less likely to make people redundant in the last three years
- tend to pay higher minimum annual wages by roughly £2,900
- provide greater access to private health care, mental health resources and flexible working
- invest on average 12% per annum (£38,000) more in on-the-job training and skills development
EOBs also reported increased employee motivation since adopting an EO model and 73% reported increased job satisfaction.
The commissioners of the report, the sector’s peak body the Employee Ownership Association (EOA UK) argue that by investing more in their people, these businesses are driving the kind growth the UK is in desperate need of—not only a stronger and fairer economy but also a cleaner planet, with EOBs much more likely to have wider environmental sustainability accreditations and a Net Zero strategy in place.
People-powered growth: The rapid rise of employee and worker ownership in the UK is the first output from the EO Knowledge Program, a two-year project to create a new baseline for understanding the impact of EOBs in the UK economy. That program has been led by independent think tank Ownership at Work (OAW), who together with the
EOA UK are calling on policymakers to work with the sector to accelerate the growth and impacts of employee ownership across the economy.
Campbell McDonald, chief executive of Ownership at Work, says, “What we found is a rapid rise in employee owned businesses that is driving a quiet revolution in responsible and sustainable productivity. This is a supply side phenomenon that deserves more attention in an economy crying out for a better kind of growth.
“Large or small, in every corner of the UK, employee owned businesses are clearly doing something very right. If we want to see more of it, we need of an industrial strategy that does more too explicitly and actively accelerate levels of employee ownership.”
