THE number of employee–owned businesseshas increased considerably over the last few years. So, let’s take a look at some of the most successful employee-owned companies in Scotland.
The employee ownership sector has seen unprecedented growth in recent times, with it becoming a popular choice among many Scottish companies. There are several reasons why a business may choose to go down this option including, higher productivity levels, sustainable growth, and enhanced job security.
In this article, we are going to explore some of the reasons a business may consider being employee-owned, as well as taking a look at the top four businesses that have employee ownership trusts.
What Does Employee Ownership Mean?
Employee ownership refers to a structure where employees have an ownership stake in the company they work for. In an employee-owned company, staff members own shares of the company either directly or through a trust, giving them a say in how the company is run and a share in its profits.
This can include partial ownership, such as through a profit-sharing plan, or full ownership, where employees own 100% of the company.
Employee ownership can take many forms, including employee stock ownership plans (ESOPs), worker cooperatives, and mutual organisations. In all cases, the goal is to align the interests of employees and the owners, creating a more collaborative and cooperative workplace where everyone has a stake in the success of the business.
Why Do Businesses Become Employee-Owned Businesses?
There are many different reasons why businesses might do this, so let’s explore them below.
Succession planning
Employee ownership can provide a solution for business owners who are looking to retire or transition out of the business but want to ensure its continued success and stability. Employee ownership can provide a way for employees to become owners and continue to operate the business after the owner has retired.
Increased Employee Engagement and Productivity
Employees like to feel valued and connected to their employer and so this option can create a sense of ownership and investment among employees. This can lead to increased motivation, engagement, and productivity. When employees have a stake in the success of the business, they are more likely to be invested in the business’s performance and take a more active role in its success.
Improved Business Performance
Employee-owned businesses have been shown to have higher levels of productivity, profitability, and employee satisfaction. In addition to, lower levels of turnover and absenteeism, compared to traditional businesses.
Employee Retention
Employee ownership can provide employees with a sense of security and stability, as they are less likely to leave a business in which they have a stake.
Employee Benefits
Another positive that comes with this is that it provides employees with a range of benefits, including increased financial security, increased retirement savings, and the opportunity to share in the success of the business.
Business Continuity
Employee ownership can provide a way for the business to continue operating even in the event of the owner’s retirement or death, helping to ensure its long-term success and stability.
Alignment of Interests
Employee ownership aligns the interests of employees and owners, as both parties have a stake in the success of the business.
Leading Employee-Owned Companies in Scotland
Highland Home Cares
At Highland Home Carers, a top home care provider located in Inverness, the employees are at the forefront of everything they do. As Scotland’s premier employee-owned company, HHC leverages its unique business structure to empower its staff and support them during challenging times, such as the Covid-19 pandemic.
The employee-owned model allowed HHC to prioritise its workers and ensure their well-being, demonstrating the advantages of this business structure in action.
Aquascot
Aquascot, a responsible seafood producer based in the Highlands, leveraged its employee ownership status to ensure production continued and partners remained safe during the Covid-19 pandemic. Employee partners stepped up to meet the 16% increase in customer demand, resulting in Covid-19 and annual profit share bonuses, a Reward & Recognition scheme, and recognition for contributions made to the business.
West Highland Free Press
The West Highland Free Press (WHFP) is a unique and inspiring example of an employee-owned company. Founded in 1972, the WHFP has been serving the communities of the West Highlands for over 50 years, providing local news, features, and opinions on a wide range of topics.
In recent years, the paper has made the transition from a traditional company structure to an employee-owned company, where the employees are the owners and have a say in how the business is run.
The transition to employee ownership has also allowed the WHFP to preserve its values and mission for future generations. By placing control in the hands of its employees, the company is protected from external influences and can continue to serve the West Highlands with impartial and independent journalism for years to come.
Woollard and Henry
Founded in 1878, Woollard & Henry is a historic manufacturing company based in Dyce. The company has roots in the papermaking industry and established a reputation for excellence with its portfolio of paper-forming products such as dandy rolls, used for imprinting watermarks in the paper.
Despite the decline of Scotland’s once-flourishing paper sector in the early 2000s, Woollard & Henry’s commitment to quality and reliability did not waver. As the company faced difficulties and was unable to secure a buyer, the family owners were forced to consider closing its doors.
However, a glimmer of hope appeared in the form of employee ownership. The workforce rallied behind the idea, eager to preserve their jobs and the legacy of the company. With their support, an employee buyout was successfully completed in 2002.
Employee-Owned Companies in Scotland
It is clear to see why employee ownership is considered to be a modern and forward-thinking initiative. With its many benefits including, employee retention, improved business performance and job security, it makes sense why so many Scottish companies have made the jump to employee ownership in recent years.
Ultimately, employee ownership is all about ensuring that businesses are run by people who care for success and longevity.
