A recent study sheds light on the impressive performance of the UK’s employee ownership sector. This sector is growing rapidly and stands out for its exceptional productivity. At the same time, it’s promoting employee well-being, fair pay, community strength, and a commitment to achieving a net-zero carbon footprint.

In this extensive research, independent investigators surveyed over 9% of the UK’s 1,650+ Employee Owned Businesses (EOBs) and compared them to non-EOBs. The findings revealed that EOBs are 8-12% more productive, as measured by Gross Value Added (GVA) per employee.

“This is an exciting piece of research which demonstrates both the strong growth in employee and worker owned businesses and the significant impact they are making to UK society and economy,” the researchers explain. “These companies are the ones to watch in terms of performance, productivity and decent work.”

Significant boost

The study also uncovered several key findings:

1. EOBs give employees twice as much in bonuses and dividends.
2. EOBs are five times less likely to lay off employees in recent years.
3. EOBs tend to pay a higher minimum annual wage, about £2,900 more, and are more likely to have fair pay accreditation.
4. EOBs provide better access to private health care, mental health resources, and flexible work arrangements.
5. EOBs invest an average of 12% more annually (£38,000) in on-the-job training and skills development.
6. A striking 83% of EOBs reported increased employee motivation, and 73% reported higher job satisfaction.

The report is championed by the Employee Ownership Association (EOA), the trade body for this sector. The EOA contends that by investing more in their workforce, these businesses are driving the kind of growth the UK urgently needs. This growth can lead to a stronger, fairer economy, more resilient communities, and a cleaner planet.

“This is a new baseline in our understanding of the scale and impact of employee and worker ownership in the UK, contrasting EOBs with non-EOBs for the first time across economic, social and environmental outcomes,” the authors explain. “The findings are remarkable.”

Economic impact

• Economy: Even though EOBs make up just 0.1% of UK businesses, they contribute significantly. They account for 0.8% of direct GVA and 1.7% to 2.1% of overall economic activity, resulting in a contribution of £32 billion to £41 billion.
• Communities: EOBs are almost three times more likely to offer volunteer opportunities, contributing over £500 million more to community causes compared to non-EOBs.
• Planet: EOBs are more likely to adopt Net Zero strategies and have environmental sustainability accreditations.

This growth in employee and worker ownership is the first accomplishment of the EO Knowledge Program, a two-year project led by Ownership at Work (OAW), an independent think tank, in collaboration with the EOA. Both organizations are urging policymakers to work with this sector to further enhance employee ownership across the economy.

“Large or small, in every corner of UK, employee and worker owned businesses are clearly doing something very right,” the authors conclude. “If we want to see more of it, we need of an industrial strategy that does more to explicitly and actively accelerate levels of employee and worker ownership.”