Employee-owned Businesses Resilience & Recovery Survey March 2021

New research commissioned by Co-operative Development Scotland and industry leadership group, Scotland for Employee Ownership, demonstrates employee-owned businesses’ approach to fair work creates financial and social resilience despite the Covid-19 pandemic. By focusing on people, job security, health, equality and well being, businesses using this model have maintained or increased turnover and improved staff retention at a time when many businesses have experienced the opposite.

The Scottish Government has an ambition for 500 employee-owned businesses in Scotland by 2030. There are currently around 150 employee-owned business operating in Scotland, of which over 100 of those are Scottish headquartered companies. Research by St Andrews University into the resilience of employee-owned companies in Scotland during the Covid-19 pandemic took place in January and February 2021[1] . Finding show that the employee ownership sector in Scotland is still in its infancy as the majority of employee-owned businesses are less than 5 years into their employee ownership journey. However, it is a growing and significant sector for Scotland especially for local economies as 90% of those businesses have all or a majority of their workforce located in Scotland.

KEY FINDINGS

Findings show that employee-owned businesses (EOBs) withstood the economic impact of the Covid-19 pandemic by demonstrating financial and social resilience.

FINANCIAL RESILIENCE

  • 90.6% EOBs had minor or no issues, with retaining employees
  • 53% EOBs turnover was unaffected or grew (23.5% EOBs turnover grew, and 29.5% turnover was unaffected)
    • Compared to non-EOBs: 80 percent of SMEs say their revenues are declining, 6% increase in revenue and 14% no change[2]
  • 23.5% EOB turnover growth sits above the ONS average taken over the period

SOCIAL RESILIENCE

  • 97% EOBs cited job protection as extremely or very important
  • 68% EOBs say that employee voice was a key organisational objective
  • 88% EOBs cited long term organisational sustainability as extremely or very important
    • This far exceeded a concern for share value growth, which was not at all important for 42.5% of EOBs during the Covid-19 pandemic.
  • 83% EOBs considered employee mental wellbeing as extremely or very important
  • 67% EOBs cited ‘paying the living wage’ as an extremely or very important
  • 75% EOBs cited workplace equality was a key organisational objective
  • 83.5% EOBs found involving employee owners not to have been an organisational challenge
  • 72% EOBs invested in staff training
  • 54% EOBs reported increased collaboration among staff
  • 75% EOBs cited maintaining an employee ownership ethos as extremely or very important
  • 94% EOBs reported that kindness, empathy and caring was shown

CASE STUDIES

Highland Home Carers

The employee owners at Highland Home Carers (HHC) in Inverness, a leading home care provider and Scotland’s largest employee-owned business, used its employee-owned status to support staff through the Covid-19 pandemic. Over the course of the pandemic, the company continued to provide pay increases, profit share schemes, enhanced sick pay and an extensive Employee Assistance Programme.

Campbell Mair, Managing Director, HCC said: “In the face of a global crisis, we can all feel extremely proud of our organisation, our roles, and the work we do. We are right to say that each and all our workforce are an absolute credit to themselves, to our organisation, to Social Care, to the people who we care for and support, and to our communities.

“Being unswervingly committed to our Employee Ownership, and valuing our workforce so highly, means that we are delighted to demonstrate inclusive and sustainable growth, shared prosperity, and positive social impact by way of share distribution and profit share.”

Aquascot

Highlands based responsible seafood producer Aquascot responded to the global pandemic by using its employee ownership status to ensure production did not cease and partners remained safe.

With customer demand rising by 16% on the previous year, employee partners stepped up to respond to the increased production demand. In recognition of this, two bonuses were issued; a Covid-19 bonus and the annual profit share. A Reward & Recognition scheme was implemented to make sure staff efforts to break yearly, weekly and daily production records didn’t go unnoticed. Finally, partners were also recognised for the contributions they made to the business, whether this is taking on additional tasks within the area they work in or taking on responsibilities in extra workstreams, such as the Partnership Council.

“At times of crisis, truly living our values have been key to making sure our partners stayed as safe and committed to the business as possible. Our partners really are Aquascot’s most valuable asset, which we demonstrate by investing in them at every opportunity.” John Housego, Partner and Managing Director, Aquascot

For a copy of the full report email: info@cds.co.uk

[1] Albonico M.,  Mladenov Z. & Sharma R. (2020) How the Covid-19 crisis is affecting UK small and medium-size enterprises. McKinsey & Co. June 2020

[2] EMPLOYEE-OWNED BUSINESS RESILIENCE & RECOVERY 31 March 2021, Dr Juliette Summers & Dr Boyka Bratanova, School of Management, University of St Andrews