At the beginning of 2019 we predicted that employee ownership (where a majority or substantial part of a business is owned by all its employees) would become part of the mainstream. It certainly was an eventful year. What’s happened and were we right?
Richer Sounds becomes employee-owned
Earlier this year, Richer Sounds became majority-owned by an employee ownership trust. As a household name familiar throughout the UK, this move has significantly increased awareness of employee ownership as a succession plan. This is game-changing because many more businesses and advisers can now relate employee ownership to a high performing business they know about.
This builds on earlier moves to employee ownership by companies such as TensCare, Riverford Organics and Aardman Animations.
Other companies becoming employee-owned in 2019
Companies we have helped transition to employee ownership in 2019 include Haworth Tompkins (architects), Allen Pyke Associates (landscape architects), Woodford Heating & Energy (heating engineers) and Blizzard Utilities (telecoms).
Employee Ownership Association goes from strength to strength
The Employee Ownership Association (EOA) is the UK membership organisation for companies that are employee-owned or are considering moving to employee ownership. Membership of this amazing organisation is a must for any business answering to either description and for professional advisers working in this field.
Its November 2019 Annual Conference at the Birmingham Metropole Hilton was a sell out with over 700 delegates from more than 220 businesses, and delegate feedback was 95% either excellent or good.
We were pleased to co-sponsor the Conference with J. Gadd Associates .
The EOA launched its #onemillionowners campaign jointly with Co-operatives UK, calling for the UK Government to invest in employee ownership and create a clear national policy objective to support growth of employee and worker-owned businesses.
In recognition of her impact on the growth in employee ownership, the EOA’s Chief Executive, Deb Oxley, was awarded an OBE.
The Labour Party made waves with its plans to expand employee ownership through creating inclusive ownership funds, requiring companies with more than 250 employees to build up a 10% employee ownership stake. This compulsory approach contrasted with the voluntary employee ownership trust legislation which provides tax incentives for retiring owners and employees. Labour’s idea is probably now expired, although we don’t rule out a future Labour manifesto containing ambitious plans for expanding employee ownership.
We couldn’t see anything in the Conservatives’ manifesto on employee ownership. We have what is probably the most powerful pro-employee ownership legislation in the world so there is much that isn’t broken and doesn’t need fixing. That said, there is plenty of scope for making it even better, and for further Government help to foster employee ownership (for example, the ideas put forward in the #onemillionowners campaign).
The Employee Ownership Manual
November saw the publication of our book The Employee Ownership Manual. It has now received its first Amazon review
Employee ownership of law firms
Law firms tend to be conservative and not to be early adopters (preferring to stick with the traditional partnership model in which only senior lawyers have a stake) yet 2019 saw two well-established and substantial solicitors practices become fully employee-owned (Doyle Clayton and Hodge Jones and Allen) alongside firms which are already partly employee-owned such as Stephens Scown and ourselves. We expect more to follow but are still waiting for the first employee ownership trust-owned accountancy firm (unless we’ve missed something).
Levels of interest in employee ownership
This week we are completing three transitions to employee ownership and we have seen a significant increase in interest over the year. We expect this trend to continue.
2019: the year of employee ownership?
We wouldn’t want to comment on the accuracy of our own prediction and will let you be the judge. But taking all the above into account, the clear view from Postlethwaite Towers is that the growth in employee ownership is perhaps the most significant change to UK business in at least a generation. In a time when we are repeatedly led to see ourselves as a divided nation, it can be one of the many things that we can all agree on. More productive, resilient and successful businesses; better rewarded and engaged employees – what is there not to like?