Employee Ownership on the Rise in United Kingdom
100 firms became employee owned in the last year, an increase of 28 percent
by Karen Kahn
The UK is making a concerted effort to grow its employee ownership sector-and it appears to be working. A recent survey by the White Rose Centre for Employee Ownership, published by the Employee Ownership Association, the UK’s employee ownership trade association, identified 470 employee-owned businesses, an increase of 28 percent in 2019. According to the researchers, there are likely an additional 300-plus very small worker cooperatives that are not included in the survey results.
Over half of conversions from traditional ownership to broad-based employee ownership — defined as at least 25 percent of ownership shares held by employees — have occurred since 2017, according to the Employee Ownership Association. Some of the more well-known private employers that have transitioned to employee ownership in recent years include Richer Sounds and Riverford Organics.
The top 50 employee-owned firms employ 178,000 workers and represent combined sales of £20.1 billion.
The White Rose survey was completed in May and June of 2020. It found 100 new employee-owned firms had launched since the previous June. These businesses are represented in every region, with the most significant growth in London (21 percent) and Scotland (17 percent). In terms of business sectors, nearly 30 percent of respondents represented “professional, scientific, and technical assistance activities, while about 14 percent were in manufacturing, and 11 percent in construction.
The Employee Ownership Association also recently published its annual list of Top 50 employee-owned firms. These firms employ 178,000 people and represent combined sales of £20.1 billion, up 4.3 percent from the previous year. That growth rate is significantly higher than the 1.2 percent sales growth for the U.K. business sector as a whole.
Alan Grieg, board member of Employee Ownership Australia, points out that 40 percent of the Top 50 UK employee-owned businesses are purpose-driven organizations participating in the social economy. These include three worker cooperatives employing nearly 12,000 people. Additionally, more than a dozen firms are incorporated as community interest corporations or define themselves as social enterprises. These include numerous community health organizations, home care providers, and child care and disability services.
Karen Kahn is a communications consultant and the editor of Employee Ownership News.
Originally published at https://www.fiftybyfifty.org on August 27, 2020.