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Job quality rated higher at co-operatives

Co-operatives and employee-owned businesses may be more resilient in times of crisis because they have higher job quality and better management practices, according to research

The University of Warwick's research, which used a combination of case studies and literature reviews, explored co-operatives’ and social enterprises’ resilience to economic changes.

Its findings highlighted how the management practices of these types of organisations may have helped to sustain employment levels and deliver good jobs in the face of economic uncertainty.

Focusing on 20 case studies of organisations across five EU countries, including the UK, researchers investigated European co-operatives' and social enterprises' contribution to job creation and retention.

Using the European Working Conditions Survey, people working in co-operatives were asked about the job prospects, levels of training, and employee voice within their organisations. The survey found these were all rated much higher by workers at such firms than the European average across all organisations.

Management was found to be particularly crucial to job quality, researchers noted. The majority of co-operative workers felt that their line managers are encouraging and supportive. When asked how supportive their line managers and co-workers are compared to other organisations most thought they were ‘better’ or ‘much better’.

Researchers suggested this is due to workers at co-operatives feeling as though everyone has a stake in the business, meaning there is also an increased sense of individual responsibility and accountability.

Peter Dickinson, senior research fellow at the Institute for Employment Research at University of Warwick, said: “The challenge for UK and other European economies since the financial crisis is not just how to create jobs but, in the era of zero-hours contracts, the gig economy and flexible labour markets, how to achieve growth in good jobs."

Speaking to HR magazine, Dickinson added that a more democratic management style meant that employees were more committed to working for co-operatives and employee-owned organisations: “In co-operatives employees are given a greater input in management decisions. It’s a combination of having a more democratic structure in place, and managers having to work with staff in a more inclusive way. As a result of that, people are more positive and committed to the organisation.”

He added that input from employees means decisions will be based on long-term job quality rather than short-term profit.

“If people are more involved in these decisions they won’t vote for their own job losses. If decisions are in the hands of an external shareholder then profit rather than jobs will be seen as more important. But generally the investment from people will be a lot greater because of better management," said Dickinson.

“This is not just reflected in the fact jobs are retained or created, there’s a lot of innovation – in better developing products and services and looking out for new customers. It’s a positive model for a range of reasons."

While several organisations have moved towards employee-owned business models, such as audio and entertainment company Richer Sounds last month, Dickinson stressed that for-profit organisations could also benefit from moving towards an inclusive management style: “There’s a lot of literature now about how productivity relates to good management practices and that doesn’t necessarily have to relate directly to co-operatives; this is true in for-profit organisations as well. If you create an inclusive democratic management style you will get very positive returns.”