Wales is about to see significant growth in the number of employee-owned businesses
The new Welsh Government’s Programme for Government has committed to doubling the number of employee-owned businesses over the next Senedd term.
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We welcome this commitment, which was one of our asks of political parties during the Senedd election campaign. The advantages of greater employee ownership of firms are proven, for the businesses, the workers themselves, and the communities they are rooted in.
Research undertaken as part of the ‘Ownership Effect Inquiry,’ chaired by Baroness Bowles, highlighted the benefits of employee ownership. For employees, this business model results in higher levels of engagement and wellbeing. Employees can also receive a top up to their salaries as a result of sharing in the capital value they create. For businesses, employee ownership leads to higher productivity levels and better workforce-retention. The wider community also benefits from having good quality local jobs and from the fact that the business is unlikely to be bought out and moved elsewhere.
Last year, we published a white paper on the next steps for employee ownership policy in Wales, with key recommendations for the next Welsh Government. Fundamental to meeting the target to double the number of employee-owned businesses is raising awareness about the model. Too few business owners are aware of the option. We want to see a sector-led leadership group set up with the objective of promoting employee ownership. We also believe that employee ownership must be promoted to business owners, who are considering their succession plans, through the Business Wales advice service.
At the Wales Co-operative Centre, we provide the specialist support needed by businesses seeking to transition to employee ownership. This service is funded by Welsh Government. This means that there is no cost to clients for advice from our specialist advisors. We have helped many businesses make the transition to employee ownership including engineering companies, health firms, retail businesses, film and TV companies, architecture firms, IT organisations and print companies.
One great example of a business in Wales we have supported to explore the potential of employee ownersip is Tregroes Waffles, a family-run bakery based in the Teifi Valley in South-West Wales. Recruiting locally, the business employees 15 people and remains strongly embedded in the community – a local institution. The owner, Kees Huysmans, began to explore the concept of Employee Ownership about five years before the transition started, inspired by the John Lewis Partnership model. The Employee Ownership model has enabled Tregroes Waffles to maintain and build upon its success in the local area, allowed for smooth business succession and empowered the workforce with high-levels of buy-in and engagement.
Employee ownership is an area of great potential for Wales. The Wales Co-operative Centre looks forward to working with Welsh Government and business organisations to deliver this important commitment.