What is an employee-owned business?
In recent years there has been an increase in the number of businesses adopting employee ownership models. There are many reasons a business might consider this route, from succession planning to greater employee engagement. Yet employee ownership is not a ‘one-size-fits-all’. Factors such as the culture of the business, the sector it is in, and the goods and services it provides can influence how a business might undertake employee ownership. In 2020, Wavehill transitioned its operations to an employee-ownership (EO) model. Whilst the initial driver for change focused on succession planning, this was coupled with a desire to further embed an open and transparent culture where staff insights helped shape the strategic direction of the company. Here we reflect on the impact this change has had on our business and our staff.
How Wavehill’s EO model works.
Under our EO model, Wavehill staff now own a majority share of the business which is held by a trust managed by three trustees: a member of the director's board, an independent trustee, and a staff representative who is voted in by staff. This model enables staff to get their views represented at a strategic level and provides an information feedback loop across the company. There are also several mechanisms in place for staff to raise ideas as well as vote on key issues. This provides everyone with a voice in shaping initiatives that affect the business, culture, and working environment.
Initiatives brought forward are reviewed, and staff are given the opportunity to consider the potential impacts on the business including the financial pros and cons. To enable a transparent and inclusive process, Wavehill’s leadership ensures that staff have access to as much appropriate information including any likely impacts an initiative might have on the business. Open communication ensures that staff understand the rationale behind decisions whilst enabling better and more informed decision-making.
Staff insights, grounded in day-to-day operations, help ensure that initiatives are meaningful and feasible; this also promotes greater buy-in for initiatives that are proposed. Staff have a greater sense of ownership which numerous internal staff surveys have shown has helped to strengthen morale. This open and transparent approach fosters a more collaborative environment where diverse perspectives are actively integrated into strategic decision-making. This in turn has cultivated a culture of inclusivity and trust, where staff feel valued and able to shape their workplace.
Employee ownership in practice.
The first test of our EO model, initiated by staff in the wake of the Covid-19 pandemic, was the introduction of the 9-day fortnight. This allows full-time staff a day off every fortnight and was implemented after extensive staff consultation. Surveys and workshops gathered staff input on flexible working options, followed by a 6-month trial to assess the impact this had on the business in order to ensure well-being and productivity were appropriately balanced. Once the trial had come to an end, the results were then presented back to staff, who unanimously voted to adopt the arrangement. The nine-day fortnight also complements a range of other pre-existing flexible working arrangements in place for all staff.
Since then, we have continued to draw on the experiences and expertise of our staff to help inform other areas of the business. This includes the initial development of our latest three-year strategic plan with a cross-section of staff, followed by further input from all staff during recent company Away Days. Staff input has also been used to refine our recruitment processes and develop accessible templates for our reports, presentations, and other outputs.
We have also incorporated democratic principles into our community initiatives such as the 1% pledge, an annual commitment to give 1% of pre-tax profit to good causes. Each year, everyone is invited to nominate and then vote for causes or organisations to support. Staff are also actively involved in reviewing the structure and criteria of the pledge. This collaborative approach ensures that Wavehill’s social impact aligns with the values of our staff.
What are the challenges?
Over the last five years, a significant amount of work has been undertaken to align Wavehill’s operations with the expectations and responsibilities of the EO model. Enabling staff involvement in decision-making has enhanced staff engagement with policies, yet at times this approach has presented certain challenges.
One of the main considerations is managing the balance between transparency and clarity. Ensuring that employees are informed without becoming overwhelmed by excessive information. Strong communication has been key in articulating the rationale for decisions to avoid misunderstandings that could undermine trust. Furthermore, defining clear boundaries around which decisions are subject to collective input versus those that require managerial discretion, or noting the extent to which staff feedback has influenced outcomes, requires careful consideration.
Looking to the future.
By addressing these challenges, we continually refine our approach and improve mechanisms to ensure a culture of transparency and trust in our decision-making processes. We want to encourage a progressive and participatory workplace where everyone feels safe and valued. Empowering employees to shape the initiatives that affect them, supports employee satisfaction that in turn better supports business outcomes.
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