Recently I had the pleasure of awarding a small local company with the prestigious employer of the year title, and what was so unique about the company was not its size but rather its ownership model. The company was what is termed an EOT (Employee Ownership Trust).
Employee ownership is designed to give workers a stake in the businesses they work for, fostering a culture of co-ownership and engagement. The criteria for establishing such models typically include legal and structural considerations, but firstly, the business must decide on the form of employee ownership.
The EOT model is the most common form in this jurisdiction, and we are incredibly well placed to foster the growth of these forms of business especially in this era of Good Jobs which places so much emphasis on matters such as engagement, voice and productivity.
At a recent Department for the Economy event two recently formed EOTs showcased their experiences and what struck me was the sincerity of their motives regarding the desire to pass on a legacy to the people who make up the business for them to carry on.
The colleague-based succession planning looms large in most EOT arrangements whereupon continuity and employees ‘having skin in the game’ are central themes, along with tax incentives, being a ready-made purchaser, as well as visibly improved employee engagement and wellbeing, and overall company performance.
There is clearly an awareness and education piece required regarding EOTs and some great work is already being done in the small manufacturer sector in mid-Ulster, but numbers are still comparatively low as there is a general lack of knowledge about this form of business.
Small, family-owned businesses without a clear succession plan would do well to look at this business model as an option to ‘pay it back’ to their loyal staff. It’s a way of securing a legacy as a local employer who looked after their staff and then handed the baton over to them to carry on their good work.
It might sound parochial but there is merit in the ‘keep it local’ motto as we strive for regional balance and keep a sense of community, rather than see companies gobbled up by investors with no real skin in the local game.
With the EOT model becoming more well-known organisations such as the Department for the Economy, the DLD Fund and Invest NI can provide help and advice.
Perhaps the biggest boon for the EOT model was the fact that I handed the best employer award to S&W Wholesale (an EOT business) at the Business Eye annual awards and said “you own this”.
- Mark McAllister is chief executive at the Labour Relations Agency for NI
