‘More firms to become staffowned to gain key resilience’
● Prediction by corporate lawyer at Scots firm Lindsays ● Comes on day celebrating staff ownership model
More firms will become employee-owned as they seek to ensure greater resilience in the wake of the coronavirus crisis, a corporate lawyer has announced today – which is Employee Ownership Day.
Douglas Roberts, a director in the corporate team at legal firm Lindsays, has advised on more than ten employee ownership (EO) deals that have completed in the past few years, and is working on some which are expected to conclude in coming months.
He expects more to follow as Edinburgh IT company Quorum reveals how the move strengthened its response to Covid-19 demands.
Cited benefits of such an ownership model – highlighted by Employee Ownership Day organiser the Employee Ownership Association – particularly in helping the economic recovery from Covid-19, include rooting local jobs and investment, improving business performance and enhancing benefits for staff.
Roberts believes businesses need more financial resilience to handle the impact of coronavirus. He said: “Employee ownership provides that, meaning it will undoubtedly become even more prevalent as companies stabilise their position and plan growth as part of post-pandemic plans.
“Holding a stake in the place you work creates a different mindset among staff, and I’ve heard throughout coronavirus how working to a common purpose has spurred innovation, performance and productivity.”
He cited a survey of such firms by Ownership Associates, finding that about threequarters believe their EO model will ensure they see the Covid-19 crisis out.
“These are factors which many businesses, particularly family ones, cannot afford to overlook. We are already seeing real changes to the relationship between workers, employers and government – meaning that the influence of employee ownership should grow as the economy is reset to ensure it’s fit for purpose.”
Lindsays – alongside Coownership Solutions – advised Quorumthroughitstransition to EO, which was completed in March last year.
The firm, which has 93 staff, said that since the outbreak of Covid-19, it has been working “flat out” to extend the remote access capabilities of its clients (including Lindsays) and to support business continuity plans enabling companies to operate from homes.
Co-owner and managing director Andrew Watson said: “Becoming employee-owned has really strengthened the positive culture and values within Quorum. That sense of ownership has seen the team really pull together during these extraordinary times.”
Roberts also noted that EO can also attract significant tax benefits for sellers, who – subject to meeting certain requirements – don’t need to pay Capital Gains Tax.