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Optimising employee ownership

Updated: Apr 19, 2023

Supporting employee ownership

Transitioning your workforce to a more engaged and innovative ownership culture is a long-term process requiring regular and effective communication. Co-owned companies thrive when the workforce is well informed regarding financial performance and management targets.

When the ownership of a business transfers to the employees, it transitions from an autocracy to a democracy. Employee representatives are elected to the board of trustees and board of directors which gives employees a collective line of communication with key decision makers.

Post transition, employee ownership is fully optimised when all stakeholders are incentivised with direct financial benefits. Employee owned companies have a unique opportunity for incentivised employees to be involved with improving sales and the effective management of costs.

Employee owners qualify for profit share bonuses where, the first £3600 is tax free. In addition, employee share schemes can help align employee incentives with company objectives, and attract new talent to the business. Immediately following transition to employee ownership, and because of the debt owed to the previous owners, share value is low and affordable. As the debt is repaid the shares accrue in value representing a rewarding investment for incentivised employees.

Employee Ownership Trust

Establishing good 2 way communication protocols between employee owners and decision makers is key to unlocking the full benefits of employee ownership.

For larger workforces, it's a good idea to create a group of key influencers to communicate with departments and subgroups ensuring a 2 way conversation with every staff member.

Some employee owned businesses use tailored phone apps to keep their workforce regularly updated and online forums can be a great place to promote innovation and discussion. Employee engagement can be measured and tracked using specialist software.

Regardless of the method, regular 2 way communication is key to releasing all that co-ownership has to offer.

Call us on 01384 274 778 / 075 888 925 88 to discuss or go ahead and book a free consultation to explore your options.

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