AT THE Wales Co-operative Centre we have been proposing that engaging employees in ownership schemes could help secure the long term success of businesses in Wales.
Employee ownership approaches engage workers and encourages them to help their companies grow. Evidence shows that employee ownership is proven to support strategies for business growth as well as importantly laying the foundations for successful business succession for owners across the UK.
Employee ownership is a growing economic force across the UK and it is very encouraging to see it on the agenda and stimulating so much debate.
The Wales Co-operative Centre has a dedicated project aimed at promoting the benefits of various forms of employee ownership to micro-business and the SME sector in Wales.
Last week the Chancellor, George Osborne, announced that he intends to set up a new owner-employee contract which will be introduced in April 2013.
The contract, which allows owners to award tax free shares worth between PS2,000 and PS50,000, in exchange for staff giving up workplace rights around unfair dismissal, training and redundancy among others, has added a new twist to the discussion. Many commentators have questioned the link between employee ownership and the requirement to sacrifice worker rights.
Employee ownership can be an opportunity for businesses to re-engage with their employees, reinvigorating the nature of the relationship between the employee and the company. However, this process must be managed to ensure the optimum benefits for everyone. It should involve wide engagement with employees so they understand what ownership means, how it relates to their position as an employee and how they can enact their rights as owners. Where employee ownership approaches have failed they have generally been where the process is considered purely as a financial transaction with no consideration given to the needs of the stakeholders.
The Chancellor's approach raises a number of practical questions.
How are shares valued and managed? How will employees be able to make a judgement on the value of their shares against the value of their employee rights? …