A boost to employee ownership in the wake of the coronavirus crisis is being predicted by some of the leading experts in the field as firms throughout Wales look to build back better and ensure greater resilience in the wake of the pandemic.
With the long-term repercussions of the Covid-19 crisis still playing out in our boardrooms, on our high streets and in our regional economies, it is clear that firms in Wales are bruised. However, the Employee Ownership Wales team at Social Business Wales, which has advised over 50 companies in Wales on ownership transition, says that Employee Ownership has the potential to revitalise and reinforce our economy, particularly in Wales with its bedrock of small and medium sized businesses.
Nicola Mehegan, from the Employee Ownership Wales team at Social Business Wales, said: “The impact of coronavirus has exposed the need for businesses to take a long hard look at their structures and practices, to ensure they are more resilient and working as efficiently and as smartly as possible, and that they have a business model that protects their firms and their workforce. Employee Ownership provides just that, meaning it will undoubtedly become even more prevalent as the Welsh economy is reset to ensure its fit for purpose and resilient. We are expecting enquiries about Employee Ownership to increase over the coming weeks and months.”
There are different levels and styles of Employee Ownership, from share options to selected members of staff to the employees or a trust owning 100 per cent of the company. Most Employee Ownership arrangements see more than 50 per cent of a company’s shares transferred to the staff, typically done by an entrepreneur or family-owned businesses. The Employee Ownership model also attracts strong tax benefits.
Nicola Mehegan added: “An interesting trend to come out of lockdown is that both staff and business owners have seen for themselves how beneficial it can be to productivity and to the relationship between business owner and workforce, if teams have more input into the ways the firm operates, day-to-day. A recent survey of employee-owned companies by Ownership Associates reported that 73 per cent of them believe their Employee Ownership model will ensure they see the Covid-19 crisis out. These are factors which many businesses in Wales, particularly family ones, cannot afford to overlook
“We work with business owners in Wales to help identify the best approach for them and their business via our free Options Appraisal via our website www.employeeownershipwales.co.uk. If they decide that Employee Ownership is for them, we then oversee the design and implementation of the transition – all fully-funded and free of charge.”
The Employee Ownership Wales team at Social Business Wales advised business consultancy, BIC Innovation, through its transition to Employee Ownership which completed in 2019. BIC Innovation employs 26 people.
Huw Watkins, Co-Founder of BIC Innovation, said: “Becoming employee owned and the sense of ownership it brings with it, has seen our team really pull together through these extraordinary times. Each and every employee is invested in the future of the company and is working so hard to ensure we do our best to navigate our way through the current crisis. I believe that our ownership model has made us much more resilient to the pandemic and is helping us adapt and evolve as we move forward post-Covid.”
Employee Ownership Wales is a service provided as part of Social Business Wales which is delivered by the Wales Co-operative Centre and funded by the European Regional development Fund through Welsh Government.