Celebrating Employee Ownership in Wales: A Catalyst for Sustainable Growth and Community well-being
Employee ownership (EO) is a transformative business model that places employees at the heart of corporate decision-making and wealth creation. As Wales continues to carve out its identity in a post-pandemic landscape, celebrating and promoting employee ownership is not only timely but essential for fostering sustainable economic growth, community resilience and individual wellbeing.
Wales, with its rich history of industrial innovation and community spirit, stands to gain significantly from the widespread adoption of employee ownership. We have seen a large growth of EO from the early days of supporting the coal industry (Cwmpas supported Tower Colliery to become the largest employee-owned company in Wales), through to today where it is embraced as an exciting business model.
For over 30 years, Cwmpas has championed employee ownership, while our efforts in supporting businesses through the process has seen the number of employee owned businesses double in the last four years.
In Wales – and at Cwmpas – we have a lot to be proud of in terms of how far we have come, while recognising there is still a lot more work to be done.
Economic Resilience and Stability
Businesses that are employee owned tend to be more resilient in the face of economic downturns. This stability is crucial for the Welsh economy which, like many others, is navigating the uncertainties of global market fluctuations and local economic challenges. Employee owned businesses often have lower turnover rates and higher levels of job satisfaction, contributing to a more stable workforce and, consequently, a more stable economy.
Succession
We have many small businesses here in Wales, with a high percentage in family ownership for a long time. Many SMEs do not have a succession plan in place and are not considering the attraction of EO at an early enough planning stage of succession management. With the economy still uncertain and lending costs still high, the EOT (Employee Ownership Trust) model – where shares in the business are bought and held by a trust on behalf of all employees – remains a very attractive route for ownership succession and thus protecting jobs in Wales.
Enhancing Productivity and Innovation
Becoming employee owned also makes a difference internally. Employee ownership aligns the interests of employees with the success of the company – when employees have a stake in the business, they are more likely to be motivated, engaged and innovative. This increased productivity can lead to better products and services, enhancing the competitiveness of Welsh businesses on both national and international stages. Innovation is further spurred by the diverse perspectives and ideas that come from a more inclusive and participatory business environment.
BIC Innovation, a business consultancy firm in Gwynedd, has seen its employee numbers more than triple, with many new ideas being generated through a shared approach to cooperation and innovation.
Community and Social Impact
One of the factors driving us to promote EO and work with businesses to transition to this model is the impact it has on our wider communities. The social fabric of Wales is fostered by employee ownership through the sense of community and shared purpose that EO brings. Businesses that are rooted in their local communities and run by local people are more likely to invest in those communities, whether through local hiring, supporting local suppliers, or participating in community initiatives. This creates a virtuous cycle of local economic development and social cohesion, reducing the socio-economic divides that can fragment communities.
Building a Fairer Economy
Employee ownership is a powerful tool for building a fairer and more equitable economy. It democratises wealth and ensures the financial benefits of success are shared more broadly among those who contribute to it. When income inequality is a pressing issue, employee ownership provides a viable path towards a more inclusive economy where prosperity is more evenly distributed.
Case Studies and Success Stories
Wales boasts many successful employee owned businesses that illustrate the model’s benefits. EO businesses cover a vast array of industries and geographic areas and see EO businesses based in diverse landscapes and communities.
Cwmni Da, a television production company based in Caernarfon, transitioned to employee ownership and has seen significant growth and stability as a result. Similarly, the success of the Swansea-based manufacturing firm Wecori, which recently became employee-owned, underscores the model’s potential to transform industries and drive regional economic growth.
Locally rooted firms such as Melin Tregwynt in Pembrokeshire and Archway Veterinary Services in Chepstow may employ relatively small numbers of people, but these are important, well paid jobs that, had the business been sold to an overseas owner or larger group, may not have been kept in the area and would have seen products, services and skills, crucially lost. All of these businesses were supported by our specialist EO team of consultants.
Government Support and Policy
The Welsh Government recognises the potential of employee ownership and has been supportive of initiatives to promote this model. Through policies and funding aimed at encouraging business owners to transition to employee ownership, the Government is playing a crucial role in fostering an environment where this model can thrive. Setting targets to double the number of employee owned businesses in Wales is a sign of this commitment. Celebrating these efforts and advocating for continued support is vital to ensure more Welsh businesses can make this transition smoothly.
The way forward
Celebrating employee ownership in Wales is not just about recognising and educating businesses about the business model; it is about championing a vision for a more resilient, equitable and innovative economy. It is about building stronger communities and creating a fairer Wales where everyone has a stake in success. As we look to the future, embracing and promoting employee ownership will be key to unlocking the full potential of Welsh businesses and the people who drive them, from exiting owners to current employees and those who will join in the future. EO is there for all of them.
By celebrating EO, we honour the values of collaboration, fairness, and community that are intrinsic to the Welsh spirit. Let us recognise and support the businesses and individuals who are leading the way in making Wales a beacon of sustainable and inclusive growth.
