People Powered Growth: We're proud to have been involved with groundbreaking research into EO and its far-reaching impact
7th November 2023 00:51
In October 2023, DJS Research Managing Director, Al Gleed, was invited to attend an event at the Houses of Parliament to hear insights from the Employee Ownership Knowledge Programme, ‘People Powered Growth’.
DJS Research has been working on the knowledge programme in partnership with the Employee Ownership Association (EOA), independent think tank Ownership at Work, WPI Economics and other stakeholders from the EO sector and academia.
The groundbreaking new report was commissioned in 2022 by the EOA and surveyed roughly 9% of Employee Owned Businesses (EOBs) in the UK and contrasted that to a comparable control group of non-EOBs. The research highlighted that in the UK there has been a rapid rise of employee owned businesses, with the sector growing by over 30% in the last 12 months. There are now at least 1,650 employee and worker owned businesses in the UK.
The benefits of EO and 'proof' of impact
The research also found that EOBs are 8% to 12% more productive than non-EOBs and they are over 50% more likely to have increased investment in Research and Development (R&D) than non-EOBs in the last five years.Other findings included that EOBs are over 50% more likely to create jobs than non EOBs (the research found that 64% of EOBs increased employee headcount in the last five years, compared to 41% of non-EOBs), and EO tends to drive up company profits, with 57% of EOBs surveyed reporting an increase in profits since restructuring to EO. Indeed EOBs were found to be more than 25% more likely to have seen their profits increase in the last five years than non-EOBs.
EOBs were also found to go further to support wellbeing in the workplace, offer greater flexibility thus creating a better work-life balance for employees, and they are also stronger on health and safety, found the research. Employee Engagement was also found to be greater amongst employees working at EO companies (83%), while almost three-quarters reported increased job satisfaction working within an EO model.
Employee owned businesses were also found to be doing more to reach Net Zero, found the study, with more than half the EOBs surveyed reporting having a Net Zero or carbon management strategy in place (54%), compared to 30% of non-EOBs.
James de le Vingne, Chief Executive of the EOA said:
"The EO Knowledge Programme establishes 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 findings are remarkable. They clearly show that this small section of the UK economy is punching above its weight across multiple dimensions of impact on individuals, businesses, communities and the wider economy.
"We need to build on these foundations. The EOA and its membership is calling on politicians, policymakers and investors to sit up and take notice. We need more proactive interventions to grow numbers of employee owned businesses, mobilise more private sector capital into this sector and super-charge the kind of responsible productivity our country so sorely needs. Together we can make it happen!"
Principal sponsors of the research included John Lewis Partnership, Mott MacDonald, David Howden, Scott Bader and RM2.
Chris Earnshaw, Partner and President of The John Lewis Partnership Council said:
"The John Lewis Partnership has always believed that employee ownership is a better way of doing business and we welcome these findings. Being an employee owned business is a model that can unlock greater value for employees, customers, suppliers and the communities that they serve. We hope this report gives policy makers food for thought on how this innovative sector could unlock even greater value for businesses and the wider UK economy."
Our contribution to the research
Our contribution included in-depth qualitative interviews with representatives from 65 EOBs of varying sizes covering a mix of business sizes and ownership types, from all major sectors of the economy and all parts of the UK. Speaking about the research, our MD Al Gleed said:
“It has been a privilege to be part of the knowledge programme and to finally see hard evidence of the real benefits of employee ownership for employees, the economy and society – as well as tangible commercial benefits. At DJS, we see the impacts and benefits of employee ownership first hand every day, but it is exciting to finally see some independent proof.”
You can find out more about EO and the findings of the research at employeeownership.co.uk/kp
Further findings from the qualitative part of the knowledge programme, conducted by DJS, will be available later in the year.