Optimising employee ownership

Transitioning your workforce to a more engaged and innovative ownership culture is a long-term process that requires regular and effective communication. Co-owned companies thrive when the workforce is well-informed about financial performance and management targets. When the ownership of a business transfers to an employee ownership trust, employees transition from being spectators to participators. This shift is facilitated by the election of employee representatives to the board of trustees, providing employees with a collective voice in key decision-making processes.

Post-transition, employee ownership is fully optimised when all stakeholders are incentivised with direct financial benefits. Employee-owned companies have a unique opportunity for employees to be involved in improving sales and effectively managing 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 the 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 two-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 two-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. Specialist software can measure and track employee engagement.

Regardless of the method, maintaining regular two-way communication is a fundamental management strategy in realising the full potential of co-ownership. It ensures that all stakeholders are informed, engaged, and aligned with the company's objectives.