Effective Employee Representation

Here at Postlethwaite, we work with a variety of experts when helping businesses become employee-owned, be it business consultants/advisers, accountants, other law firms or advisers and/or directly with the business owners themselves.

This month, we are delighted to feature a guest blog from Libby Unsworth and Jeremy Gadd of J Gadd Associates – the UK’s leading independent multi-service provider of commercial, cultural and engagement support to the employee-owned sector.

Here, Libby and Jeremy explain how to plan for effective employee representation as you transition your business – and why it’s never too soon to start.

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Employee representation.

When you’re employee-owned, this matters – both commercially and culturally. It’s part of your governance. So if you’re new to Employee Ownership (EO) or considering transition, where should you start?

What steps can you take to ensure yours is effective, with the right set-up to bring it to life?

The first step is to understand there’s no ‘one size fits all’.

The format you choose, and how it works, will depend on the size and nature of your organisation. Effective employee representation can range from a small forum to a full-on council, and will be complemented by the differing viewpoint brought by your Employee Trustees.

The power to influence

The second step is to recognise what employee representation is – and what it isn’t.

An employee representative group (ERG) is a group of employees who are elected, or selected, to represent their fellow employee owners. It is a conduit for the mutual exchange of information, thoughts, ideas and influence between senior leaders and employees.

An ERG isn’t a decision-making body, but it can exert a profound influence on the decisions you take.

Building productive relationships

And the third step? To remember that, done well, employee representation isn’t a ‘fluffy’ add-on. With the right support and development, an ERG will add real commercial value, with its ability to drive innovation just one of its strengths.

In an EO business, effective employee representation is about building productive working relationships with employee owners.

This will take time, energy and the courage to have honest conversations on topics that might be complex – and feel challenging. But ultimately it will unlock the benefits that employee ownership can bring.

Putting representation on the radar

So when should owners/founders and their senior teams start thinking about employee representation?

Ideally, right at the start of the EO transition process. In reality, most are (rightly) focused on the legal and financial aspects then.

At J Gadd Associates, we understand this so advise that – while not your top priority – how you plan to land EO with your people should still be on your radar at this time. Some organisations use an ERG to engage their employees on their journey into EO.

Then, when there is the space to focus, that’s the point to engage professional support from a business with sound experience in this field.

The right support and insight – at the right time

This will provide valuable guidance on how to create your own framework for employee representation – whether through elected/selected representatives for an ERG, forum, ‘champions’ or the appointment of Employee Trustees.

Engaging expert support helps to develop a constructive culture of knowledge, questioning and accountability, on which the ‘life and spice’ of employee ownership can then be built.

This is particularly useful when it comes to the often misunderstood role of your Employee Trustees, who are there to ensure your organisation is being run for the long-term interest of your employees. They are not a ‘mouthpiece’ for others; instead, they bring their own experience and understanding of being an employee to your Trust Board. A subtle, but important, difference.

Handing over control

Experienced, professional support can also prepare owners/founders personally to ‘hand over the reins’ to a new MD as they and their senior team learn to exercise power in a subtler way.

The good news is that many transitioning businesses are already fundamentally well-run, with a clear grasp of effective communication and engagement.

However, for most there will still be a period of experimentation and adjustment, while they absorb the reality of life as an EO organisation – and explore how to make their employee representation truly effective, as their future takes shape.

To find out more about how J Gadd Associates can support you with our Transition, People and Governance services, please visit www.jgadd.co.uk or email us as at info@jgadd.co.uk.