Why employee ownership?
There are a number of substantive benefits that employee ownership has been shown to deliver time and again. However, these benefits are often hard won and do not materialise simply because an organisation becomes employee owned.
It is the combination of employees feeling they have a meaningful stake in their own organisations, alongside a culture that gives them a greater say in how the organisation is run, that has the potential to unlock the kind of success enjoyed by the likes of the John Lewis Partnership.
A significant and constantly growing evidence base shows that:
- A combination of shared ownership and employee participation delivers superior organisational performance;
- Employee owned businesses outperform more traditionally structured firms in times of recession;
- Employee owned enterprises report increased productivity levels, between 9 and 19% higher than traditionally structured similar businesses (according to a 2010 report by the CASS business school);
- Employee ownership creates more sustainable enterprises, as decision-making is focused on promoting longer term success over short term risk-taking to the benefit of external shareholders;
- Because they have high employment standards, involve staff, are more transparent and give everyone a stake, employee owned businesses are good at recruiting and retaining talented, committed staff and are often employers of choice in their sectors;
- Employee owned organisations have higher levels of employee engagement and a culture of genuine participation in the running of the organisation, which in turn creates extremely high staff satisfaction and reduce absenteeism;
- Staff in employee owned businesses tend to be more innovative, entrepreneurial and committed to the company and its success, sustaining internal an culture of peer challenge and continual improvement;
- Due to the way they are run, employee owned businesses tend enjoy stronger customer and supplier relationships, and high levels of commitment to corporate the communities they operate in.
Please review the research papers and evidence base catalogued at the website of the Employee Ownership Association (EOA), including the joint EOA-Baxi Partnership publication Making Employee Ownership Work which benchmarks governance arrangements at 25 of the most well-established employee owned companies in the UK.
David Erdal brings employee ownership to life:
David Erdal, a pioneer of the employee-owned business movement and author of Beyond the Corporation: Humanity Working makes the case for employee ownership in a three-part interview series with Social Enterprise Live: