January 10th, 2022, marks two years since Seetec became an employee-owned organisation. Ireland has relatively few businesses whose employees are major shareholders with a significant stake in how the business is run. In the UK however, this type of corporate governance structure has been steadily growing since 2012. In 2020, there was a record 30 % increase in employee-owned businesses.
Why is employee-ownership growing across Europe and the UK?
What does that mean for people working within those organisations but also for the customers they provide goods and services for?
Karl Milne, Executive Director of Seetec Ireland, spoke about the benefits of employee-owned businesses and their possible potential in the Irish economic landscape.
“Because this type of organisation isn’t as common in Ireland, I always clarify that Seetec Ireland doesn’t have employee share options, this is a different model. We have an employee-owned trust that has a majority share in the company (the employee trust owns 51% of the company). It shares certain similarities with the co-operatives model that made such a significant contribution to our society and economy in the agriculture sector.”
Having worked at the executive operational level in different sectors, Karl found that corporate structures with remote ownership lacked knowledge and connection to the locales they were operating in.
“I admired the employee-owned business model long before Seetec became employee owned, I had worked for companies with remote ownership and decision making that was removed from the impact of those decisions. Our employee owners in Ireland are delivering our services and are critical to our success. The employee-owned model offers a more sustainable long-term approach and supports the culture of employee involvement that I have always believed in.”
Across Europe and the UK, employee-owned organisations ‘are more productive, more resilient and provide greater benefits to their workers, communities and society when compared to traditional businesses.’ (Briscoe, Carroll and Hughes, 2005, Birchall, 2011, Erdal, 2011, Goel, Tuominem, Jussilia, 2012, Napier, 2013). Employee ownership not only means working in that enterprise but also contributing to its success. Profits are generally distributed with a twofold objective: to pay wages to the staff and to ensure the long-term sustainability of the business.
A study called The Employee Ownership Advantage conducted by City University London stated that ‘managers in publicly traded companies often cite pressure to increase share value as an important factor in decision-making. Faced with this pressure, publicly traded companies focus on actions that have a direct and immediate impact on their share value, often at the expense of activities that have a longer time horizon. Employee-owned businesses are in principle insulated from this pressure, and thus would be expected to be less susceptible to this kind of trade-off.’
Karl said: “Employee ownership brings more certainty about the future of our organisation.
“I’ve worked in companies that have had a change in ownership and the negative impact that has had on employees and customers. Our model of employee owners delivering valued services in their communities works really well.
“It’s embedded in our culture that we listen to our employees and this was recognised in our recent accreditation as a Great Place to Work. One of the key dimensions of how we run the business is giving a formal framework for our employee owners to contribute to the business, I think there are others in SESI who would be well placed to tell you about their experience of working in an employee-owned business.”