· 1 min read · Features

Hot topic: employee ownership, part two

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COVID-19 changed business priorities for many, but some saw it as an opportunity to change direction. Interest in employee ownership hit record highs during the pandemic, with 250 new employee-owned businesses established in the past 18 months.

Sue Tumelty, founder, The HR Dept

The main benefit of shared ownership is not related to salary and pay – it’s about creating a successful company, with ongoing profitability, which attracts and retains staff. Having said that, there is a financial benefit to employees in that staff can enjoy a share of the profits of which £3,600 per year can be tax free.

However, the primary benefit is engagement with the company and a say in how it is run. Although the shares are owned by the Employee Ownership Trust for the benefit of all staff, the business is itself run by a board of directors, which sets budgets and plans for the future year. They also decide what funds are available to be shared among employees.

This profit should be shared equally and fairly among employees. If this trust is abused, then trustees can step in and ensure employee interests are properly represented.

 

Matt Cheung, CEO, Clarasys

We believe that for people to be happy at work, they need not only to feel that they belong, but that they can grow and are able to have autonomy, mastery and purpose. This was reinforced during the pandemic as people more than ever, sought purpose in their work.

Often, achieving these goals requires a fundamental shift from a rigid hierarchy, to a ‘team of teams’ approach. This requires the ability to invest in the long term and to put data, decisions and trust in the hands of your people.

Being an employee-owned company allows us at Clarasys to sustain our model, formally committing to the values that underpin our ways of working and ensuring that everyone feels they can ‘act like owners’ of the business. As a result, we have a fantastic organisational culture that is built on trust, transparency and ownership.

This is part two of an article that appears in the November/December 2021 print issue of HR magazine. Check out part one here and subscribe today to have all our latest articles delivered right to your desk.