Every business has to compete to attract the best people, and then to ensure that their valued new hires aren’t lured away by a more attractive employer. Although employee-owned companies aren’t immune from these challenges, they will often have characteristics that make them easier to overcome. Indeed, many of them have superpowers when it comes to both attracting and retaining employees.
The EO effect
The recently published (October 2023) EO Knowledge Programme, which looks at the impact of employee ownership on business performance, has a number of findings which show how employee-owned companies tend to be more attractive places to work:
- They are more likely to protect employees’ quality of life
- Their employees are more motivated and engaged and enjoy higher job satisfaction
- They invest more in training and skills
- They are more likely to share financial information with their employees and encourage them to participate in how the business is run
- Employees have greater job security
- They are more likely to be growing their workforce
- They pay a fairer basic wage, and employees as a whole earn more
- They pay more attention to diversity and inclusion
- They also have a more positive impact on their communities, help to address inequality and are more focussed on addressing climate change.
Gen Z expectations
Altogether the picture shows a compelling match between what an increasing number of employees are looking for from their jobs and the experience that employee-owned companies offer. This link is particularly strong when looking at Generation Z (those born mid-1990s to mid-2010s – now our largest and most diverse generation), who place a high value on, among other things, fulfilment and positive purpose, flexible working, personal financial stability and diversity.
Generation Z are both our youngest and our next workforce, and no business which plans on having a future can afford to ignore how they would define a good employer.
Of course, the attraction of working for an employee-owned company isn’t limited to Generation Z. Who wouldn’t want to work in a company offering the advantages found by the EO Knowledge Programme?
Attracting and retaining in practice
But on its own this is not enough. Employee-owned companies will also need to embed their values in their culture and communicate to all their audiences that they are doing so.
Synergy Vision, a client who became employee owned in 2021 has been doing just that and as a result seen retention greatly improve from 25% staff turnover to currently 14%.
In our own firm, which became 100% employee-owned in March 2023, we have found that telling our story to those we meet, work for or who follow us has already had a significant positive impact on our ability to both engage our team in what we do and attract new people.