The Employee Ownership Association (EOA) has launched an award to support new employee-owned businesses.
Sponsored by John Lewis Partnership, the EOA Investment Award will offer the winning enterprise £10,000 towards the cost of professional fees incurred in building their employee-ownership structure.
The employee-owned sector is worth £30bn annually, with the number of employee-owned businesses increasing at an annual rate of almost 10%. Employee-owned businesses have also grown their sales by 11.1% in the recession, compared to non-employee owned businesses, which only grew by 0.6%.
Iain Hasdell, chair of the Employee Ownership Association, said: “The EOA Investment Award is an exciting opportunity for all business owners and business founders who are exploring a move to employee-ownership.”
The business model gave employees a significant stake in the company they work for, he added. “Employees have a say in how the business is run and directly benefit from its success, but the benefits for individual businesses and the UK economy go far beyond that,” he said.
According to the EOA, 80% of employee owners experience a sense of achievement from their jobs.
“Research has shown that employee-owned businesses continue to outperform their non-EO counterparts in terms of productivity and profitability,” said Mr Hasdell.
“They survived the recession better, their employees are more engaged and they are seeing consistent and steady growth where others are struggling. Nationally, employee-owned companies now account for over £30bn of UK GDP. The sector is growing because co-owned companies tend to be more successful, competitive and sustainable.”
John Lewis is one of the enterprises championing the employee-ownership model. In 2014 the partnership was ranked second in the list of the top 100 co-operatives in the UK, with a turnover of £10bn. John Lewis employees raised the money for the award through their activities on UK Employee Ownership Day.
An independent panel of employee-owners will judge the applications. They will look at whether the business being created offers a competing story that can inspire others to become employee-owned. Other issues include whether the award will make a material positive difference to the ability of the business to become employee-owned and whether the business will make an important contribution to the competitiveness of the UK economy.
The winner will be announced on Employee Ownership Day on 3 July and presented the award by the Charlie Mayfield, chair of John Lewis Partnership.
He said: “There is increasing evidence to show that employee owned companies are more productive, resilient, and profitable long-term, and that people who work for employee-owned businesses achieve higher levels of well-being. John Lewis and Waitrose Partners are therefore delighted to sponsor the EOA Investment Award, as one of our commitments to inspire and inform a new generation of employee-owned businesses.”
One of the enterprises that have successfully transitioned to employee-ownership is Page\Park, an architectural firm in Glasgow. Since becoming an employee-owned business in December 2013, it has recruited 12 new employee-owners, increasing its staff to 54 members.
Brian Park, of Page\Park, said: “The transition to employee-ownership presented no real challenges. Instead there was an atmosphere of interest and excitement from all involved. A tagline of ‘All change, no change’ emphasised to staff and employees that, on a day-to-day basis, the business would run in the same way that it had always done.
“It may all sound too good to be true, but it has been painless and indeed energising to have made this change… I’m now even more convinced that making the move to employee-ownership was the right thing to do.”
• Businesses considering moving to employee ownership can submit their applications for the award by 5pm on 29 May. As employee-owned enterprises, worker co-operatives can also apply for the award. Applications must be no more than 1,000 words in length and can be sent to [email protected].