Growth of Scottish employee ownership celebrated on EO Day but rate expected to accelerate

Employee ownership in Scotland is continuing to grow and could account for 5 per cent of all Scottish businesses, according to Co-operative Development Scotland (CDS), which is celebrating EO Day (Employee Ownership Day) today by urging more business owners to explore it as a viable succession option.

Recent research has revealed that there are 86 employee-owned companies in Scotland, with approximately 6,800 employee-owners generating a combined turnover of around £925 million, and Sarah Deas, director of CDS, predicts that as many as five per cent of all Scottish businesses could ultimately be owned by their employees.

She said: “In the last five years the number of employee owned businesses operating in Scotland has trebled and we are forecasting a ‘deal a month’ on average over the next year. When considering their exit strategy, the motivations for a business owner to go down the employee ownership route tends to focus on a number of key areas, such as rewarding and empowering loyal employees and rooting the business in the local community.”

CDS points to statistics which it claims consistently demonstrate that employee-owned businesses outperform their non EO counterparts in terms of higher levels of profitability, improved business resilience during times of recession, increased productivity and enhanced employee wellbeing.

Ms Deas added: “Over a ten year period we aspire to achieve a tenfold increase in employee ownership in Scotland, and with 16,000 employers in Scotland looking to transfer ownership in the next five years, we expect take up to continue accelerating.”

Scotland’s latest business to adopt the model is newly established social care provider Caledonia Social Care, which officially launches today on EO Day.

With a projected annual turnover of £2.5 million, Caledonia Social Care will focus on the provision of care at home support, including the provision of dementia specific services, alongside personal care to older, disabled and vulnerable people.

Alzheimer Scotland will initially be the main investor but plans to hand it over fully to the newly formed enterprise in the future. This is the first time a Scottish charity has established one of its service functions as a separate entity and put it into employee ownership.

Margaret Paterson, managing director of Caledonia Social Care, said: “I am thrilled to be officially celebrating the opening of Caledonia Social Care on Employee Ownership Day. Our dynamic employee-owned business model takes forward ownership of many of Alzheimer Scotland’s previous care at home services to support people living with dementia in the community and our staff will be at the very heart of everything we do. As well as delivering care at home services we also offer personalised care to older, physically disabled and vulnerable people to help them remain in their own homes and to live as independent a life as possible for as long as possible.

“Employee ownership is particularly suited to the social care sector as it is consistently shown to improve staff engagement and wellbeing, which can lead to better patient experience and outcomes. As owners, employees have a say in how the business is run, and clients and their families are reassured that the business will remain rooted in the area and be run for the benefit of local people.

“The launch of Caledonia Social Care will be a real boost to Scotland’s care sector, with an empowered workforce of 150 employee owners, committed to providing an exceptional level of care to 480 clients.”

Henry Simmons, chief executive of Alzheimer Scotland, added: “Following months of preparations, I believe that Caledonia Social Care has a bright future ahead in providing high-quality dementia and more generic home-care services. The employee ownership model we adopted in this new venture will bring many benefits to all staff ensuring that they have an effective voice throughout the organisation. I am proud of what we have all achieved to maintain high quality support for people living with dementia and vulnerable people in the community and I wish the whole team the very best of luck moving forward.”