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A John Lewis economy: will an increase in employee ownership boost business growth in the UK?

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Deputy prime minister Nick Clegg has announced plans to create a “John Lewis economy” by increasing employee share-ownership schemes and making it easier for employers to take part.

The idea behind the plan is that companies owned by employees tend to perform better, meaning share schemes encourage business growth. But will an increase in employee share-ownership schemes realistically be the panacea - lowering absenteeism, decreasing staff turnover and boosting growth?

Phil Ainsley, director of employee benefits, Equiniti

Nick Clegg's speech urging firms to offer shares to employees was welcome, but the general profile of 'all-employee' equity reward needs to move up the political and corporate agenda.

This comes at a time when the national press continues to highlight the boardroom excesses of capitalism.

Equity's ability to engage, motivate and reward employees has slipped below some HR horizons. Its impact can be more effective, cheaper and longer lasting than cash and there are established routes to deliver tax-advantaged schemes. But these methods have not been updated and lag behind the times.

We need a renewed focus on encouraging companies that can use such vehicles to do so, alongside changes that will bring them into the modern era and make them more relevant to the audience. Hopefully, the all-party support enjoyed by employee share ownership will take Clegg's urging as the trigger for their reform and relaunch.

Jo Causon, CEO, Institute of Customer Service

 

Nick Clegg's proposition aims to 'lower absenteeism, lower staff turnover, and lower production costs' for UK businesses. But is adopting ownership models the way to do this?

Engaged employees have a passion for the business, leading to a better customer experience and stronger gains.

John Lewis's reputation for service suggests a committed workforce, and the bottom line benefits are clear.

But there are many ways a firm can demonstrate an investment in its employees, incentivise commitment and ensure a focus on the customer. They are not always financial.

Ownership is not the critical issue here; engagement and involvement are. Any business that makes this work will see an impact on its bottom line.

Poor customer service costs the UK economy £15.3 billion a year. Companies need to ensure their staff are engaged and committed to delivering the highest possible service quality.