As part of the 15-year anniversary of I-COM, we began thinking about the future of our agency and decided to set up an Employee Owned Trust (EOT), transferring a majority stake of business into the trust.
This means that our employees now have a greater say in the running and direction of the business, as well as sharing in the profits of the business as long as they remain an employee.
The decision to go employee owned was in part made to increase employee satisfaction and improve staff retention, however it is also a great opportunity for recruiting new talent.
According to data from employeeownership.co.uk, as of June 2019, there were 370 employee owned firms in Britain and I-COM is one of only 32 EOT companies in the North West.
That same data showed that 60% of the firms had become employee owned since 2014. This recent rise in employee ownership shows that staff retention and engagement is on the minds of company directors and that number is likely to continue to rise in years to come - meaning it’s important that recruiters understand how best to talk about potential candidates.
The benefits of employee ownership
Studies have shown that employee ownership can have a positive effect on employee engagement, empowerment, motivation and wellbeing.
As the name suggests, this is due to the fact that creating an EOT gives employees more control over the work they do, and our decision to put 51% of shares into the trust means that the workforce have a majority share in the business and so are able to take a more active role in the direction of the business.
A survey by Lifeworks found that 76% of employees are looking for new opportunities as they don’t feel valued in their current role. By creating an EOT, employers are showing that they value employees’ influence, and trust staff to make the right decisions for the business.
Further to that, taking an active role in deciding the direction of the business will also lead to greater financial rewards, as employees will now receive a share of the profits on top of their regular salary.
Unlike annual bonuses provided by many companies, employee ownership provides additional stability. Historically, we’ve always given back some of our profits by way of bonuses, but the employee ownership trust makes this a formal commitment to our people.
There are also tax benefits to setting up a trust, which means that each employee can earn up to £3,600 of the profits income tax-free, on top of their salary.
While financial bonuses won’t be immediately available to new recruits, knowing that these rewards are lying in wait can do a lot to persuade the best candidates to work for you. It can provide additional confidence that the recruiting company is open to someone coming in and suggesting new ways of working.
In today’s employment market where skilled people are in short supply, and with the trend for millennials and Gen Z to move around in order to progress their career rather than stick with one company for life like their predecessors, giving the team a stake in the company seems like the next logical step to take to keep talent invested in the agency.
We’re already starting to see better engagement and the team is more focused on delivering even greater results for our clients.
You can read more about our decision to go employee owned here - www.i-com.net/blog/weve-become-employee-owned-company