UK workers are assuming substantial organisational control of the firms in which they work, with the past two months distinguished by a smattering of corporate conversions to employee ownership (EO).
On 13 June, Blackpool recruitment and payroll services group Kinetic  and Peterborough management consultancy firm BCS Group  both revealed that they have switched to EO. Their announcements followed one earlier this month from Devon-based organic veg-box company Riverford,  stating that employees have taken a 74% stake in the firm. Riverford’s turnover alone is registered as £56.6 million, indicating that the economic force of employee-owned businesses (EOBs) is significant.
In May, Edinburgh firm i4 Product Design  and another firm from the same sector, Cambridge Design Partnership (CDP),  both announced that they had switched to EO, with CDP’s founding partners Mike Beadman, Mike Cane and Matt Schumann saying: “We believe this is a great opportunity for CDP to accelerate our mission to become a world-leading innovator, with the company’s most important asset – its staff – at the centre of our strategy.
“It means we can continue to grow without the involvement of external shareholders, so we can maintain full control over the direction of the business and our creative culture.”
According to advocacy group the Employee Ownership Association, the UK economy’s cross-industry EO segment is growing at a rate of 10% per year, with more and more EOB conversions happening all the time, as leaders place the fates of their firms in the hands of staff. Which factors are driving this trend?
The Institute of Leadership & Management's head of research, policy and standards Kate Cooper says: “Research indicates that millennials seek a sense of purpose from their jobs, and that they want to make a difference. The Institute has recently begun a research project on responsible leadership, in partnership with the University of Birmingham and the West Midlands Combined Authority.  The launch event at the University on 14 June featured a panel of local sixth-formers, and one in particular spoke very eloquently about the need for meaning in the work that she was looking for when she enters the job market.”
With that in mind, Cooper explains, “it makes sense that, as those budding candidates grow older and rise through the ranks of their chosen professions, there will be a movement to share the rewards more widely. At present, there is a disconnect: if you’re looking for purpose and you’re making a difference – but it’s primarily someone else who is achieving the rewards for your effort – something’s not quite right about that.
“If we are seeing the emergence of young companies started by people with a drive to have purpose woven into their work, then sharing rewards will be a more natural outcome of that cultural approach than traditional modes of remuneration.”
Cooper notes: “John Lewis’s continued success as a brand is so often attributed to its partnership model, whereby everyone shares in the company’s commercial achievements – and that model has existed at the firm since 1929. Firms in the John Lewis mould have traditionally been in a minority. But now a new generation of employees has entered the workforce on a quest for meaning, they’re in a position not only to influence established corporations, but to set up their own, shaped by their worldviews.”
She adds: “millennials with the earliest birth dates are now getting well into their 30s, so they’re more of an established part of the workforce. It’s also likely that they would be less inclined to job-hop, as many of them will by now have mortgages and children. So they will be looking to bring change from within at the companies where they have developed their careers.”
For further thoughts on corporate values, check out these learning resources from the Institute
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