Tag: Highland Home Carers

Highland Home Carers benefits from employee ownership

Stephen Pennington   Highland Home Carers held a conference last week to mark their 20th anniversary and their 10th year of employee ownership.

It was a fantastic event, attracting a TV personality, a Cabinet Minister, an MSP, the NHS Director for Adult Social Care as well as a wealth of key figures from the sector.  Here, HR administrator Laura Dobinson describes the day.

This is the most high-profile event we have run and we were all a bit nervous as to how it would work out. I’m delighted to say that everything just slotted into place.

Nick Boyle, the founder of Highland Home Carers (HHC), launched the event with an inspiring speech explaining why he sold the business to the employees.

HHC was set up to deliver the highest possible standards of care, enabling people in the Highlands to remain in their homes, in their local communities, for as long as possible. By moving the business to employee ownership, HHC’s unique ethos is secure and we can focus on quality of care.

Managing Director Stephen Pennington (pictured above) outlined how HHC is trailblazing the way adult social care is delivered in the UK. There is talk from Westminster of an integrated service with councils and the NHS collaborating rather than working in silos – this is already the case in the Highlands. Stephen explained how the employee-owned model provides a platform for HHC to build a stable and strong company.

Attendees could choose from a number of workshops to attend which covered a wide range of topics – money management, wellbeing, wills and trusts, personalisation of care, social exclusion.

Danny Alexander

Chief Secretary to the Treasury, and local MP, Rt Hon Danny Alexander, joined us for lunch and chatted to carers, service users and guests. In his keynote speech, Danny recalled opening HHC’s Stadium Road office in 2006, and was delighted to follow the progress of the company.

He said it was employee-owned companies like HHC which motivated him to introduce the recent legislation offering tax breaks to encourage more employee ownership of businesses. He told the audience that HHC is one of the best examples of employee ownership in the UK – a superb accolade!

The event concluded with a lively panel session. Aggie Mackenzie, from TV’s How Clean is Your House and Storage Hoarders talked about how she couldn’t get anywhere when organising care for her mother until she contacted HHC. She was full of praise for the service and said she knew their business model was different; this conference helped her understand why.

Aggie MacKenzie

Feedback so far has been great, with some attendees asking us to make it an annual event. It was so good to get together with friends and supporters to talk about the issues surrounding care, and employee ownership. It was particularly encouraging to hear how highly regarded HHC is by our key stakeholders.

Care is a challenging sector to work in. As employee owners we are immensely proud of what we do. At HHC we know we are part of something special. Looking forward to the next 20 years – and beyond!

Trust me – employee ownership works for Highland Home Carers

Jocelyn-Mitchell-1Highland Home Carers was established in 1994 to provide the first independent domiciliary care and support service in Inverness and the wider area. The business enables many people to remain in their own homes when otherwise they might have been moved into institutional care. The company increasingly works in partnership with NHS Highland to improve the quality of health and social care services in local communities.

Ten years ago, Highland Home Carers became employee-owned. Here, Jocelyn Mitchell – care worker and Chair of the Trustees – explains how the trustees ensure the company is run properly.

The trustee role is an important one within Highland Home Carers.  We represent the majority shareholding and it is vital that we hold the board to account – just like shareholders in conventional companies.

It is not our job to run the company, but we do have to sanction major decisions that could affect the long term stability of the business.  A few years ago the board restructured the company’s loan, opting to move the debt to a more favourable lender. This meant higher repayments in the short term, but would result in us being debt-free in a few years.  As trustees, we had to be satisfied that the impact of higher payments had been fully considered and that it would be for the company’s long term benefit.

We have grown significantly in the past two years. With 350 employees covering 8069 square miles, quality of delivery of care is central to all we do.  One of the issues we wanted to explore with the board was how we could ensure our high standards would be maintained when we were undergoing a period of growth. Our MD fully explained the measures put in place – as employees, we are able to see the consequences of board and management decisions.

Our board is superb, with a mix of management, elected employees and two experienced non-executives.  We haven’t had to exercise our veto over any decisions but there is no complacency. We continue to challenge and ask for explanations.

We are quite unusual in that none of our directors are trustees – how could we hold the board to account if some of us were involved in board decisions? There are six trustees – three elected by our colleagues and three appointed by the board. Two of the appointed trustees are also employees. The sixth is an independent trustee who is not an employee and supports us in our role.

There is a myth that if employees own the company then they will make decisions in their own interests and lose sight of the sustainability of the business.  That can’t happen here. We have a responsibility to current and future employees. This year we are celebrating our 20th year, 10 of which have been as an employee-owned company.  As trustees, it is our job to ensure we are still here for the next 20 years and far beyond, while still providing the best care and being a great place to work.

Selling to employees – a solution for owner exit?

Harper Macleod's Chris Kerr

Chris Kerr

Chris Kerr is a partner in Harper Macleod’s Corporate team and specialises in advising family-owned, owner-managed and employee-owned businesses in Scotland. He has been involved in some of the country’s highest profile employee buy outs and restructurings.

Here he looks at the growth of employee buy outs, some recent success stories, and considers when the legal sector should present employee ownership options to their clients.

The volume of business sales has slowed significantly in recent times due to the recession. Access to finance has been difficult, even for healthy businesses, and many business owners have postponed plans to move on.

However, the drivers for exit remain strong and at some point these owners will be looking at their succession options. Selling to employees is becoming an increasingly acknowledged route for succession. The exit can be managed, minimising distraction to the company’s operation, and some form of vendor financing can facilitate the funding of the sale. One attraction of this option is that, to an extent, the “legacy” of the company can be preserved.

There have been several high-profile employee buy-outs in Scotland in recent years, all concluded with apparently positive results. Business performance has improved, employee engagement levels have been raised and vendors report they made the right decision.

So is this an option that should be presented to all clients? The Westminster Government commissioned Graeme Nuttall, of London law firm Field Fisher Waterhouse, to report on how employee ownership could become more of a mainstream business model.

The Nuttall Report was published in July 2012, making 28 recommendations, all of which have been accepted by the Government. The Scottish Government has also expressed support for the model. Is the legal profession ready for this increased interest?

Harper Macleod is seen as one of the leaders in this field. In recent years the firm advised successful engineering company Clansman Dynamics Ltd on their employee buy-out. Clansman designs and manufactures manipulators, with 95% of their production going to export.

Clansman Dyncamics' Dick Philbrick

Clansman Dynamics’ Dick Philbrick

The owner, Dick Philbrick, had received several approaches for the business, mainly from overseas buyers. Dick was adamant that the business and skills should remain in Scotland and sought an exit solution that would secure the business in the local area.

The business has a turnover of £11m and a workforce of 38 employees so an overseas sale would hit the local economy. The management-led employee buy-out seemed a good answer. This meant that Dick could manage his own exit from the firm, and also shape the future of the business. Importantly, for employees, customers and suppliers, there was continuity.

Rather than the business being negatively impacted by the transfer of ownership, as so often happens, the firm has gone from strength to strength. In fact the company has experienced a 65% increase in turnover in the past three years.

Another client of Harper Macleod is award-winning Highland Home Carers. The founder, Nick Boyle, could not stomach the thought of selling the company to one of the national agencies as he was not convinced they would deliver the same high standards of care for which the firm is renowned.

Highland Home Carers member of staff with customer

Highland Home Carers is another successful Scottish employee buyout story

Since the employee buy-out, the company has more than doubled in size, made significant acquisitions and expanded its geographic reach. Having a stake in the business has significantly improved employee retention, vital in an industry where consistency of service is key. The business recently restructured its financing and now anticipates a successful future.

Harper Macleod also advises Woollard & Henry Ltd. The Dyce based manufacturer is one of the most successful employee buy-outs of recent years. A brave diversification strategy has resulted in six consecutive years of 30%+ growth in profit.

Scottish Enterprise is dedicating resource to promoting a model which leads to a rise in productivity and profitability. Employee owned businesses tend to stay rooted in their local area and are unlikely to relocate overseas, which also supports the overall economic growth strategy.

Co-operative Development Scotland (CDS) provides a free signposting service to businesses and advisers who may be looking to find out more. CDS is working with the Law Society of Scotland to raise awareness of employee buy-outs amongst the profession. CDS is offering speakers to faculty groups and networking meetings and depending on location, it is possible meetings could be hosted by employee owned businesses, giving direct insight into the model.

Co-operative Development Scotland is a Scottish Enterprise subsidiary, established to help companies grow by setting up consortium, employee-owned and community businesses. It works in partnership with Highlands and Islands Enterprise.