Building a better economy with more employee ownership

Iain Hasdell, Chief Executive of the Employee Ownership Association has written an excellent call to action for government to facilitate building a better economy with more employee ownership.

In the UK and most of the rest of the advanced world economies we are dominated by publicly traded companies which don’t lead to a fair distribution of wealth. Hasdell writes that 50% of the people in the UK own 1% of the wealth, with the wealthiest 20% owning a huge 84% of the wealth. This isn’t just bad news for people outside of the wealthiest brackets. Other studies have indicated that more equal societies have a higher quality of living for everyone, including the richest. So this isn’t about taking from the rich and giving to the poor – all of society would benefit.

The disconnect between ownership and doing the actual work also creates unhelpful and distracting tensions such as pressure to please analysts and deliver quarterly results rather than building an environment for the long-term that brings the best out in employees and delivers value to customers and society. Employee owned companies are free to do the opposite.

Not only would an economy based on more employee ownership be fairer for the masses who actually do the work, but based on the evidence from employee owned companies today, they are likely to outperform traditionally owned rivals though higher employee engagement, motivation and innovation. This presents a new opportunity for growth at a time when our current capitalist system is failing miserably.

So what can we do about this?

Hasdell wants government to remove red tape and tax disincentives that currently hamper wider employee ownership and also take an active role in educating the business community about the potential of employee ownership. This really rings true for me as someone who has started a business. At various times we considered selling the business, but never even considered selling it to the employees as an option purely through our own ignorance of this being an option, and when we eventually did look into it, the process was off-putting (although not impossible, and I still hope the business will eventually become employee-owned.)

I know that there are many entrepreneurs and other business owners who want to realise some value for their investment, risk and hard work in building their businesses. I also know that many of these people fear the implications of ‘selling out’ – the impact on the employees and fear of the fate of their ‘baby’ falling into the hands of new owners who care only about financial return on investment. I urge these people to consider selling the company to the employees instead. There’s help available from consultants like Baxi Partnership to explore this option and help you through the process.

If you are an employee working for owner-managers, then why not plant the seed about employee ownership? There’s a good chance that they will have never even considered it, but it could open their eyes to a way to realise some value for themselves whilst leaving a real legacy for the employees who helped them to build the company.

3 thoughts on “Building a better economy with more employee ownership

  1. Pingback: Innovating business ownership models | Tom Nixon

  2. I was curious if you ever thought of changing
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    But maybe you could a little more in the way of content
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