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Research unveiled in the UK parliament on 18 October reveals employee and worker owned businesses are 8-12% more productive, are more profitable and more beneficial for employees, communities and the planet than non-EO peers.
European law firm Fieldfisher is proud to share the findings of a new report into the significant productivity benefits of employee and worker owned businesses (EOBs) in the UK.
Research unveiled in parliament on 18 October suggests the fast-growing UK employee ownership (EO) sector is markedly outperforming the UK’s national productivity trend, delivering an 8-12% productivity premium above non-EOBs*.
These productivity gains are all the more remarkable, as EOBs simultaneously contribute to greater employee wellbeing, fair pay, community resilience and commitment to net zero.
The findings are the result of the most ambitious and in-depth study of its kind into the benefits of EO, in which independent researchers surveyed c.9% of the UK’s 1,650+ EOBs and compared results to a control group of non-EOBs.
The study report, entitled "Exploring the potential of the Employee Ownership business model" links the productivity uplift to various factors, including that EOBs:
- Return twice as much in bonuses and dividends to employees
- Were five times less likely to make people redundant in the last three years
- Tend to pay higher minimum annual wage by roughly £2,900 and are over twice as likely to hold accreditation for fair pay
- Provide more supported access to private healthcare, mental health resources and flexible working
- Invest on average 12% per annum (£38,000) more in on-the-job training and skills
This report from WPI Economics is on research findings under the Employee Ownership Knowledge Programme, drawing on additional insights from DJS Research. There is an accompanying summary report 'People Powered Growth'.
Fieldfisher Tax and Structuring Partner Graeme Nuttall OBE, a renowned expert on EO and author of the 2012 Nuttall Review Of Employee Ownership, was a member of the Programme Oversight Board. The independent study was commissioned by the UK's Employee Ownership Association and Fieldfisher was one of its sponsors.
Fieldfisher is a leading legal adviser on EO transactions, having worked for over 35 years with multiple clients in numerous sectors on transferring their businesses to employee-owned models.
Commenting on the findings of the report, Fieldfisher Partner Graeme Nuttall OBE said:
"'People Powered Growth' summarises landmark research. These findings confirm what practitioners in this area have long seen as the key benefits of employee ownership.
"'EO' is a business model that is rapidly being recognised as a force for social and environmental good, and this study reveals its wider economic benefits to the UK economy at a time when fresh thinking and positive practical options are very much needed.
"We would like to thank the researchers for their work and the EOA for commissioning such a comprehensive study."
The Fieldfisher Employee Ownership Solutions team is jointly-led by Partners Mark Gearing and Neil Palmer.
*Based on Gross Value Added (GVA) per employee. The productivity estimate is driven partly from the estimates for the numbers of employees working in EOBs in the UK. Data on the numbers of EOBs is not gathered by any national agency. A rigorous process estimated these numbers to create a verifiable estimate of numbers of employees. The range in the productivity estimates reflects this process.