When Julian Richer, the founder of Richer Sounds, announced he was selling a majority stake in his hi-fi chain to its employees, the business press called it a ‘quirky retirement plan’. Two years on, and the model is no longer an eccentric’s choice. It’s becoming a quiet revolution in British capitalism.
According to the Employee Ownership Association, the number of employee-owned businesses in the UK has more than doubled in the last decade, from around 100 to over 300. They range from the John Lewis Partnership to that vegan café on your high street. ‘I wanted to create a workplace where everyone had a stake in the outcome,’ says Mike Cherry, a founder of an engineering firm who converted to employee ownership last year. ‘It’s not about altruism. It’s about productivity.’
The human cost of the traditional shareholder model is, after all, burnout and disenchantment. Gallup’s annual survey of employee engagement shows that only 9% of UK workers feel ‘involved in and enthusiastic about their work’. The employee ownership model flips that: research from the Kingston University’s Centre for Employee Ownership found that these firms have higher resilience during downturns, lower turnover, and a more equitable pay spread.
There is, of course, a cultural shift happening beneath the numbers. In a society increasingly sceptical of the 1%, the idea of collective ownership resonates across generations. ‘My kids see it as a moral choice,’ admits Sarah Lowes, who sold her marketing agency to a trust for her staff. ‘But it’s also a practical one. I didn’t want to sell to a private equity firm and watch my team get stripped apart.’
Yet the revolution is not without its tensions. Employee ownership trusts can feel like a tick-box exercise if not managed inclusively. There are stories of workers who don’t believe the new system will change anything. ‘The culture has to be built every day,’ says Cherry. ‘It’s not enough to hand over shares.’
What does this mean for the man on the street? A slower, more deliberate kind of capitalism. One where your boss might be your colleague. It’s not going to topple the FTSE 100, but it might just make your local pub or your IT consultancy a little fairer. And in an era of zero-hour contracts and gig economy angst, that feels like a small but significant victory.
