Scale of Scotland’s employee ownership ‘sector’ revealed

The chairman of the UK’s largest employee-owned company has praised Scotland’s commitment to the business model as new figures reveal the ‘sector’ is thriving.

John Lewis Partnership’s Sir Charlie Mayfield was in Edinburgh yesterday for the first Inspire EO Scotland conference, which attracted around 150 business figures from across the country to RBS’ Gogarburn headquarters.

The conference took place as new research from the University of Stirling shows there are 71 employee-owned businesses operating in Scotland, with approximately 6,500 employee-owners generating a combined turnover of around £900million.

And according to Sir Charlie, the figures show the Scottish employee ownership sector is performing strongly.

He said: “It is encouraging to see the growth of employee ownership in Scotland and the recognition of the benefits it can offer – including higher levels of employee engagement and productivity, higher profitability and greater levels of innovation.

“At the John Lewis Partnership, we take pride in the fact that as owners, our Partners are highly engaged and are involved in the future of the business.”

The event, organised in collaboration between John Lewis, RBS and Scottish Enterprise, was designed for new and existing businesses keen to learn more about employee ownership.

Other keynote speakers included Dr Lena Wilson CBE, chief executive of Scottish Enterprise and Alison Rose, chief executive of Commercial and Private Banking at RBS.

Deputy First Minister John Swinney also spoke at Inspire EO and highlighted how the model can help to boost the Scottish economy.

He said: “Employee ownership can have powerful positive effects – not only on employee motivation and wellbeing but ultimately on the bottom-line. I am encouraged that an increasing number of Scottish companies are benefitting from this business model.”

The event also saw a number of speakers call for Scottish business owners to think about succession and to ensure an exit plan is in place – before it is too late.

Dr Wilson said: “These latest figures reinforce that employee ownership is a growing phenomenon with more and more businesses recognising the importance of succession planning and the benefits this innovative business model offers.

“This is good news for Scotland because wider collaboration and co-ownership is proven to create jobs faster and boost productivity and performance. We would encourage owners to consider succession at the earliest possible opportunity and find out more about employee ownership.”

That view was echoed on the day by Dick Philbrick, founder and managing director of Clansman Dynamics, a robotics manufacturer based in East Kilbride. He chose employee ownership as a succession solution to safeguard the future of the company, with the transition occurring in 2009.

He said: “Uncertainty in business is never helpful, and employees would regularly ask me what would happen to Clansman once I retired. Having a clear succession plan produced stability within the business, and we have seen profits double in the first five years since the transition with turnover growing to £11.4million in 2014.”

For RBS, Inspire EO was an opportunity for SMEs to learn more about the benefits of employee ownership and how they can make it work for them.

Alison Rose, CEO, Commercial & Private Banking, RBS, said: “RBS supports more UK small businesses than any other bank so we were delighted to host the Inspire EO conference. Employee ownership can be a highly effective way to engage staff and run a successful business.”

Support for business owners considering succession issues and employee ownership is available via Co-operative Development Scotland, an arm of Scottish Enterprise.

Deputy First Minister John Swinney added: “I would encourage interested companies to engage with Co-operative Development Scotland and learn what employee ownership could do for them.”