FIVE KEY BENEFITS OF EMPLOYEE OWNERSHIP

Latest figures show that there are 86 employee owned (EO) companies operating in Scotland, with approximately 6,800 employee-owners generating a combined turnover of around £925million. With 12% of SME employers anticipating transfer of ownership in the next five years, it is expected that the take up of employee ownership in Scotland will continue to accelerate.

But what are the reasons behind the rising popularity in an EO structure and would it be suitable for your business? Sarah Deas, director at Co-operative Development Scotland, outlines five key benefits of employee ownership below.

11/12/15 - 15112301 - SCOTTISH ENTERPRISEGLASGOWSarah Deas

Employee ownership is a succession solution

“If you’re a business owner considering the future of your business, employer ownership can provide a solution to managing your exit whilst achieving a competitive price and safeguarding the future of your business. It secures the long-term future of your company, retaining jobs, skills and investment, and is a succession option that should be explored by businesses of all sizes and sectors.”

Employee ownership can drive the performance of your business

“Having a personal stake in the business can significantly boost motivation among employees. Statistics consistently demonstrate that employee-owned businesses outperform their non EO counterparts in terms of higher levels of profitability, improved business resilience during times of recession, increased productivity, enhanced employee wellbeing, and greater desire to innovate.”

The rewards of strong performance are shared with the employees

“Employee ownership is an opportunity to repay and strengthen the hard work and loyalty of staff with financial bonuses such as annual tax-free dividend payments. This incentive can further drive staff productivity and overall profitability as a result.”

Employee ownership roots the business in Scotland

“A businesses that is owned by its employees is more likely to remain rooted in its local community, providing jobs, retaining skills and generating wealth in the local area for generations to come. Businesses which chiefly serve their local communities can also benefit when the owners themselves have a strongly developed knowledge of the area.

Employees are given a greater voice in the operation of the business

“Knowing the company better than anyone else, employees are well placed to give their input on key decisions such as ways to increase performance. As owners, staff feel more involved and engaged with the future of the business, driving job satisfaction and strengthening their commitment to the company.“

If you would like to learn more about how employee ownership could benefit your business, please get in touch.

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