Employee Ownership (EO): research on the impacts and benefits
Our research has shown that the number of Employee-Owned Businesses (EOB) in Wales has grown in number, geography and across sectors in recent years. This is timely as the Welsh Government have recently committed to doubling the number of Employee-Owned Businesses in Wales. Our research helps provide an evidence base on the impacts and benefits of employee ownership for businesses, employees as well as wider societal benefits.
Commissioned by Cwmpas to understand the impact of employee ownership, we interviewed a number of existing businesses to better understand the transition and consequent impacts of employee ownership on their business. We considered the impact such ownership models can have on succession planning and business growth, productivity, resilience and employee engagement. We also made recommendations on how to further support existing EOBs in Wales to take advantage of the opportunities that the model can offer and how best to extend this to other businesses looking to transfer their business model in the future.
The EO process differs from company to company but largely enables greater transparency for employees around how their company is run and formalises greater employee input into the future direction of a company. There is not a one size fits all approach and the EOB model can take different forms depending on the company’s size, culture and sector.
Our key findings shows that:
Welsh EOBs generally already had a progressive ethos with good transparency and input from employees before becoming employee-owned. However, these businesses were able to apply more structure to facilitate greater employee engagement having transferred to an EO model, which had the effect of reinforcing or enhancing pre-existing practices.
Transferring to an EOB led to a shift in the business culture, leading to greater unity, where people work closer together towards a common goal.
It had a positive impact on recruitment and retention, in some instances it has given EOBs a point of difference to their competitors and, thereby, helping them to attract the best talent into their business.
Transferring to an EOB has demonstrated a link with supporting sustainable, locally embedded growth in Wales.
Additional resources can be found via the following links.