Employee ownership – better business and happier employees
This article first appeared in Employee Benefits, 1 Nov 12
Employee ownership has never been higher on the UK political agenda. The 2012 Party Conference season culminated in front page headlines for George Osborne's "swap rights for shares" proposal. There are other measures out for consultation. This Autumn the Government will deliver its full response to the Nuttall Review of Employee Ownership. HM Treasury will also complete its review of employee ownership before the Autumn Statement. The Cabinet Office continues to promote public sector mutualisations.
It is important to remember what underpins this push to promote employee ownership into the mainstream of the UK economy. There is a strong case for greater diversity of business models in the UK, so as to move away from the so-called "plc monoculture", and the employee ownership business model in particular offers a winning combination. It delivers both improved business performance and increased employee wellbeing, often with community benefits.
Academic literature supports employee ownership's claims to deliver this winning combination of better business and happier employees. There has, however, been a tendency to disbelieve the advantages, even among those associated with employee ownership.
The Nuttall Review looked at existing research, including work done by the Employee Ownership Association and the Mutuals Taskforce. The review found considerable evidence to suggest that employee ownership did indeed improve business performance and increase economic resilience. There was also greater employee commitment and engagement with reduced absenteeism.
Rather than wait for additional research most employers and employees are happy to follow their own instincts, learning from the many flourishing companies that already adopt an employee ownership business model. It is the many and varied case studies that really provide the best evidence of the success of employee ownership.
Graeme Nuttall, Partner, Field Fisher Waterhouse LLP and author of "Sharing Success": the Nuttall Review of Employee Ownership" (July 2012)