Deborah Oxley was touring the floor of Gripple’ s Old Gun Works factory in Sheffield with the boss, Hugh Facey, when she saw the light. “Hugh was being teased about the sales figures by the guys on the floor. They joked around with him, challenged him, asking why they weren’t doing better and told him to pull his finger out. The atmosphere was terrific.”
“Hugh’s passion for his people and the purpose of his business blew me away too, and it was so infectious in the employee owners I met there. They cared so much about their work.”
Oxley’s Gripple visit was part of the interview to persuade her to become the new director of membership of the Employee Ownership Association. Facey, a director on the EOA board, was showing her first hand how his employee-owned manufacturing company worked.
She was sold, and took the job. “I was intrigued that this business model had such a tremendous effect on the staff. Hugh was also the first one to spell out his unusual approach which is that ‘labour should employ capital’ rather than ‘capital employing labour’. I thought, why hadn't I known about this form of ownership? And why isn’t there more of it in the UK?”
That was five years ago. Since then, Oxley has been spreading the light with the evangelism of a convert – even more so after stepping up to become chief executive of the EOA some 18 months ago.
We catch up for a coffee at Oxford Circus, as she dashes around London between meetings with Westminster BIS officials and other EO companies. She’s down for the day from the HQ in Melton, a small town outside her native Hull where she was marketing director for the Hull City image project before joining the association. “We moved the HQ from London a few years ago for cost reasons, but also to ensure the movement stayed focused on the regions, and the north, where there are a surprisingly high number of employee-owned businesses."
“Making sure we are not south-east-centric is very important. There’s another interesting twist to employee share-owned companies, which is the high numbers of engineering and manufacturing companies as well as professional services who go for this ownership structure.”
“They tend to be run by people who are utterly dedicated to their profession, are highly innovative by nature, have created many patents and want to leave a legacy – and they don’t want their businesses sold off. They are also all strong believers that people are their greatest assets.”
While the John Lewis Partnership is the most visible cheerleader of the UK’s indirect employee-owned companies, there are many others substantial companies with varying models of ownership. Gripple, she says, is a fantastic example of one of the UK’s most successful engineering companies – it makes wire-joining and tensioning devices for fencing, among other things – which is owned directly by its employees and can never be sold. All Gripple’s 460 workers own shares; indeed, they are obliged to buy shares themselves on joining. There is a minimum wage of £20,000, no HR department, daily meetings and team briefings, and all staff have pension and healthcare provisions. And only one person has been sacked in decades.
Indeed, employee-owned companies come in all shapes and sizes: from Scott Bader, the multinational chemical manufacturer, to design engineering consultancy Arup, to Wilkin & Son, the Tiptree jam makers. A new convert is Lush, the soapmakers, after owners Mark and Mo Constantine recently put a slice of the company into a trust for employees. Meanwhile, Grant Thornton’s boss Sacha Romanovitch has led the accountancy firm away from the partnership model to one of shared ownership by its 4,500 staff.
According to Oxley's latest tally, there are 325 employee-shared ownership businesses in the UK, with turnover of around £35bn (equivalent to some 4 per cent of GDP) and employing at least 200,000 people. Hundreds more companies are in the pipeline waiting to convert, she says, and the sector is forecast to double over the next decade.
No wonder. Oxley points out that companies where staff have skin in the game are not just good businesses, but are every bit as red-blooded as their listed or privately-owned competitors. Maybe more so – but for different reasons.
“All the research shows that companies which are either directly or indirectly owned by employees have higher productivity rates, investment and innovation, less debt, fairer pay rates and happier staff (and therefore happier families), which means fewer problems, from mental health issues to financial.” Studies show that even financial literacy is higher among employees of member firms, as staff want to know and understand the accounts with more rigour.
What’s more, Oxley adds that a YouGov survey about to be published shows the public has more trust in employee-owned businesses and would like to see more of them, particularly at a time when trust in business per se is at its lowest.
So her big question to Prime Minister Theresa May is: why do employee-share ownership not get even a mention in the government’s recent paper on industrial strategy? “I am mystified. The PM has made much of wanting a society for the many and not the few and has talked a lot about fairer business. So why doesn’t the sector get a mention? I’m not talking about financial support or even favours, but that the government should acknowledge the success and give us more momentum, more awareness, specifically now in a post-Brexit world. We need to be seen as mainstream.”
It is indeed odd, particularly as two of its greatest advocates have such starring roles in the Conservative firmament. Andy Street, who is the new Tory poster boy having won the West Midlands Mayoralty, is the former boss of the John Lewis stores, while the enobled ‘chubby grocer’ Mark Price (who used to run Waitrose and is now Lord Price) is a minister for trade and investment, galloping around the globe drumming up overseas business.
If Oxley were to meet the PM one-to-one, what would she want from her? “Well, if she wants to reconnect with people as she says, then she needs to take a much closer look at employee-shared ownership and see what government can do to promote the sector. Workers on boards are a mixed blessing: they don't change anything about ownership. It’s a big ask, but I would like to see her next government put ownership and engagement up there, front and centre in the industrial strategy.”
Oxley has another request, for the professions and the media.
“One of the problems we have discovered faced by companies wanting to become employee-owned is that many accountancy and legal firms don't have the specialist knowledge to help them implement the structures. We are now working with the ICAW to redress this.”
And the media? “Well, the media is obsessed by the big-listed companies which represent only a few hundred of the 5.5 million companies in the UK. I can see why they are, as the big news around all the controversial subjects like high pay and poor conditions are at these companies. But this obsession means that the public gets only the bad news about business, which is not great when we need growth in a post-Brexit world. There is no question that employee ownership is a better way of doing business. The media needs to make it far more mainstream too.”
Hopefully, this is a start.
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