Becoming employee-owned: Why and how to do it

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On national Employee Ownership Day, Agilisys' HRD explains the company’s decision to move to this business model

People have always been at the heart of our business. Which is why it made absolute sense for us to invest in those responsible for our success: our employees. Just over a year ago we took the step to become the first employee-owned business in our sector – and we are now one of the largest in the UK.

Research conducted by the Employee Ownership Association (EOA) has revealed that employee-owned businesses outgrow and outperform their non-employee-owned counterparts – even during difficult economic periods – and have a happier, more engaged workforce.

By owning a significant and meaningful stake in the business our employees have a greater say in how it operates and how they can add value. Evidence has shown that employee owners, when effectively engaged, give back to their businesses in commitment, time, and innovation.

Backing from the government has enhanced the appeal of, and created growing interest in, this well-established model. Yet despite the benefits employee ownership structures are still not automatically considered as a potential option for business owners. There is clearly more to be done to highlight what can be gained from moving to a model of co-ownership.

What’s involved in becoming an employee-owned business?

Employee ownership is not a destination in its own right; it’s a journey that takes time. The transition can happen over a period of years and the ownership structure can evolve along the way.

While every employee-owned business is different there are many similar characteristics; a clear and compelling long-term vision for the organisation and its employees, and a desire for increased involvement of staff through representation should be at the forefront for anyone considering the transition. A commitment to transparency of information and openness in decision-making is also critical. And ultimately, a belief in the employees’ ability to take the business forward successfully and a willingness from senior staff to allow them to do so.

Publications such as the EOA’s How to Get Started and Guide to Structuring Employee Ownership demonstrate the benefits of employee ownership, outline how straightforward it is to establish, and provide valuable first steps for interested owners.

Lessons to be learned

Whatever the reason for moving to a model of employee ownership, the most likely are often succession planning, growth planning, and at start-up. Identifying which model of ownership is best suited to an organisation and implementing it according to the specific nature of the business is particularly important, and there are some key lessons to be learnt from those who have successfully transitioned:

  • Get involved in the employee ownership community and seek guidance from organisations such as the EOA early on.
  • Enlist the help of a specialist adviser that has undertaken other employee ownership transactions and is able to offer experience-based advice.
  • Consider how your employees will feel about the move to employee ownership, and at what stage to involve them in the conversation.

Final thoughts

By becoming employee-owned Agilisys has laid the foundations for its future success. As a member of the wider employee-owned community we want to help challenge the perception that it is too difficult to move into employee ownership, that it isn’t an effective business model, and that it’s not a better way of doing business. It definitely is – for employee owners, the customers they serve, and the health and stability of the UK economy.

Simon Mounsey is director of HR at Agilisys

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